How to take advantage of insurance automation trends
How do you move towards automation?
By Martin Stewart : 30th of July 2019
By its very nature, the insurance industry has traditionally been cautious and measured. Innovation has occurred incrementally and after considerable thought and analysis. But the landscape is now changing. New entrants are coming thick and fast and they’re leveraging insurance automation to do things faster and smarter. These ideas will help you identify how to stay ahead of the curve in the age of automation.
Not automating is costing you
McKinsey estimates that up to 40% of the operating costs of life and P&C insurance companies stems from less than 30 core end-to-end processes, mostly associated with claims.
And it could be your downfall
Digital disrupters are inevitable, and when they come, they’ll be coming with shiny new systems that replace slow, repetitive, and disconnected interactions with the responsive omni-channel experiences customers value.
67% of consumers site bad customer experience as reason for churn.
The good news: insurance is ripe for automation
Up to 45% of all work activities can be automated right now with current technology. More importantly, automation can reduce the cost of a claim by as much as 30%.
The potential gains for both organisations and customers are huge. For example, imagine your customers filing an insurance claim simply by sending a text rather than filling out forms or tying up your assessors’ time.
Insurance automation has almost unlimited use cases
Insurance companies, their customers and employees will all be impacted by automation. 91% of executives believe digital technologies have the potential to fundamentally transform the way their company works.
– Eliminate paper forms
– Enable self-service
– Facilitate customer support
– Issue policy quotes
– Standardise underwriting
– Manage documentation
– Investigate claims
– Process claims
– Renew premiums
– Monitor insured items
– Personalise customer experience
– Identify discrepancies and fraud
– Conduct compliance checks
– Introduce new products
application
underwriting
renewals
claims
How do you move towards automation?
While automation is coming quickly, you don’t necessarily need to rebuild your business processes from the ground up. Like any major organisational change, automating your business should be planned. There are several areas that you can focus on in tandem as you move towards the future.
Identify low hanging fruit
Hone in on the areas where you can win with automation quickly. Automating claims processing and introducing chatbots for service queries are quick wins that have been used in many industries.
Partner with insuretech vendors
This offers you the opportunity to leverage groundbreaking technology without the necessary R&D costs or time.
Test and learn
Transformation has often involved large-scale projects that take years to deliver. In an agile world, small-scale pilots allow you to test and learn quickly before scaling up and moving onto the next opportunity.
Leave legacy systems behind
It’s time to leave your legacy systems in the past. This approach will allow you to open your team to creating a new normal rather than just putting another band-aid on an issue.
Don’t forget to reskill your people
Automation will mean some roles will no longer be required. Some estimate that over 25 percent of full-time positions will be consolidated or reduced. But leveraging new technology requires specialist skills. Bring your institutional knowledge on the journey by reskilling people to oversee the process and be accountable for its success. Areas to consider include:
Marketing and sales roles that can support digital channels
Analytics teams to identify claims fraud
Advanced software to support personalisation
Agile software development skills to develop more valuable features faster
Automation is inevitable
The insurance industry is already in the process of being automated.
There’s no time to spare, every level of your organisation must now turn its mind to what can be automated and how quickly you can make an impact. If you don’t, you will be left behind while old and new competitors take advantage of efficiencies, changing customer preferences and technological advancements to leapfrog into the age of automation.
It’s no longer a question of ‘if’ but rather ‘when’ you’re going to start.
Automated chatbots are changing the human experience
80% of leaders already or plan to use chatbots to improve their customer experience by 2020. Chatbots help scale service delivery and can be used to help guide customers through processes and speed decision-making without the need to involve staff. Insurers are already using chatbots to:
Field customer claims enquiries
Apply for insurance
Simplify language and avoid jargon
Service customers 24/7
Ask the right questions
As a leader, you need to be asking the right questions now to plan for the future.
Human Resources
What skill sets do you need in the future?
Is your talent and training strategy nimble enough to adapt?
Do your leaders require development to take advantage of automation?
How will you attract younger, tech-savvy employees?
How will you retain the knowledge and experience of Gen X and Baby Boomers?
Finance
What cost efficiencies can be realised in your business?
What hardware or equipment do you need to invest in to enable automation?
How can you harness the data available through new technology?
Will new technology talk to legacy systems?
Sales
How will automation in other areas, like driverless vehicles, affect the demand for your products?
What efficiencies can you gain by automating sales processes?
How do you maintain customer trust when using automation to sell or service?
Risk
What technologies, like sensors, can you take advantage of to better manage risk?
How will you identify the risks inherent in new technology?
What changes to policies and processes are required to minimise new areas of vulnerability?
How will you underwrite emerging risks from new technology?