Insurance lags behind other industries when it comes to modernization and digitization. Many processes are still largely manual and paper-based, making them slow, costly and frustrating. Insurers have long recognized the need for digital transformation to address these challenges, but until recently, progress has been slow. In the past year, however, pandemic challenges that require customer interactions at a distance have accelerated the need for the quick implementation of digital solutions--to enable all stakeholders to continue developing new business and service existing policies.
Digital transformation is happening ahead of schedule
The pandemic acceleration has collapsed implementation timelines. Modernization projects that may have happened in 3-5 years, are being fast-tracked to begin immediately and finish in just months. Plans are being accelerated. Investments are being re-prioritized. As a result, those carriers who don’t engage in the transformation, risk being left behind.
So, what technology opportunities exist to help carriers revolutionize the end-to-end insurance policy lifecycle?
7 ways tech optimizes the insurance lifecycle
1. Accelerate product development
Carriers need to be agile enough to make frequent product changes or launch new products in reaction to changes like low interest rates, regulatory changes and evolving customer expectations. But rapid product development is often hamstrung by legacy policy admin systems (PAS) which require base code changes every time products are modified.
2. Leverage data analytics
Insurance carriers are built on data. They are storehouses of this critical strategic asset that could be mined to predict trends, identify opportunities, and precisely target marketing and product development to emerging client needs. Unfortunately, yesterday’s aging policy admin systems are a barrier to harvesting the data that will power those revolutionary advances.
3. Create superior digital customer experiences
Today’s insurance customers expect the same real-time, personalized experiences they get in every other type of online transaction. Unfortunately, the slow pace of technological evolution in insurance has not kept up with those evolving expectations.
4. Ensure compliance
Regulations governing carrier, distributor and advisor sales behavior require documentation to create demonstrable audit trails. Manual, paper-based approaches make this is a cumbersome, frustrating process, and create real compliance risk.
5. Accelerate commission payments
All industry stakeholders feel the pain of calculating and paying accurate commissions in a timely manner when largely manual processes are employed.
6. Increase advisor productivity
Many advisors still rely on paper-based, manual approaches to manage their practices. Sales growth is limited by the amount of time left over to spend with prospects and clients.
7. Optimize operational efficiency
Insurance operations are complex and often burdened by manual workflows that create a headwind, slowing everything from product innovation to policy approval.
Today’s decisions determine next generation success
The time is right for insurance carriers and distributors to define their unique roadmap for digital transformation. The first step could be a foundational shift from legacy PAS to a modern policy admin system, or it might be a quicker implementation of digital sales and service tools that will support new business growth. The choice depends on each organization’s current IT infrastructure, budget and strategic priorities. But the undeniable truth is that change in the industry is well underway, and those who put off these important decisions will begin to lag behind the rest of the market.