There’s been a huge surge in software development aimed at improving efficiency across the insurance value chain. In fact, InsurTech is now a half-billion-dollar industry, expected to top $1.1 billion in the next five years, according to the firm Research and Markets. From direct-to-consumer tools, agency management platforms and comparative rating engines to simple document sharing and electronic signature capture, it seems every day new digital tools emerge ready to transform the industry
Executive SummaryLaunching new InsurTech software tools on their own isn’t necessarily what organizations need to adapt and succeed. The key is convergence and integration of these tools, writes Sharmilla Ray, head of Product and Strategy at Vertafore, an insurance software company. In this piece, Ray outlines three ways that convergence can help both customer service and propel business growth.
But launching more tools isn’t necessarily the digital fix organizations need. The lack of integration and convergence between these tools results in fragmented products that don’t work together and create silos for carriers, independent agencies and the end customer. Instead of making things more efficient, this can actually make it worse, causing redundant data entry, communication breakdown and an overall feeling of disconnect.
The solution to taming the chaos is to create software integrations that align all the players and truly streamline processes. There is incredible potential for carriers to adopt convergent software that can connect across the value chain and leverage shared data to drive greater productivity, speed up communications and improve decision-making — all of which will trickle down to strengthen the customer experience.
Here are just three examples where convergence can make a huge impact:
- To level the playing field in comparative rating. For carriers, growing new business requires getting more quotes in front of new customers. The more agencies quote with a specific carrier, the more business that carrier is likely to convert. In personal lines, thousands of agencies use multicarrier rating platforms where they can enter data once and see quotes from multiple carriers. However, in order to complete the process, agents often have to re-enter customer data into individual carrier sites. Carriers that have opted not to integrate with a rating platform require agents to manually enter all customer data into their website in order to obtain a quote. Each carrier wants to differentiate on their agency portal experience, but in doing so, they’re actually creating barriers to efficiency — and potential new business. Carriers that aren’t on a rating platform may simply get overlooked by agents because the quoting process is too cumbersome and time consuming.
The industry is already offering this capability in commercial lines, with companies like Bold Penguin and Insureon taking the lead. In order to provide the streamlined experience agents and the end customer expect — and to remain competitive — independent agency carriers need to think about integrating their quoting systems with real-time rating software for both personal lines and commercial lines. This will ensure they can get in front of as many agents and customers as possible.
- To provide high-quality, consistent customer experience. Policyholders who buy insurance from an independent agent view their primary relationship to be with their agent. However, there are times when challenges around syncing data between agencies and carriers can make it hard for the agent to deliver quality customer experience. For instance, when a policyholder submits a personal auto claim on a weekend, they are most likely to contact the carrier directly. Come Monday morning, they would expect their agent to have current information about the claim and its status, but sometimes the agent doesn’t find out the customer even submitted a claim until the next day or unless the customer calls to check in. The agent misses an opportunity to strengthen the customer relationship by proactively calling first thing Monday morning to make sure the customer is all right. It also exposes a disconnect between the agency and carrier when the ability to exchange that information in real time could have strengthened both the agency-insured as well as the agency-carrier relationship.
With real-time data synchronization, agencies could get automatic notification of claims made directly with the carrier and have instant access to real-time claims status. They can proactively reach out to customers to make sure their needs are being met and handle any issues or concerns before they become problematic. By exchanging data, the carrier and the agency can seamlessly share the customer relationship together, to maximize service and, ultimately, customer loyalty.
- To improve business growth strategy. A longstanding challenge that independent agency carriers face is determining whether they have the right network of agencies in place to drive the growth they’re aiming for. In most situations, this requires a combination of business results and individual conversations with agencies to determine if they are aligned and able to deliver on the carrier’s growth strategy.
With new data and insights that cover the independent agency channel specifically, carriers can see which agencies are growing in which lines of business and which markets, and they can be strategic about which agencies they should partner with based on specific business objectives. They can also see their competitiveness in market in terms of pricing and coverage relative to other carriers. This way, they can spend more time driving growth and profitability, and less time trying to find pockets of opportunity.
Not Easy, but Necessary Process
More cohesive, digitized processes are not easy to implement from a technical perspective, but it’s absolutely the direction the industry must move in order to meet the growing demands of customers who expect streamlined, digitized experiences. Until we see a substantial convergence of technologies and integration of data, the industry will remain fragmented and siloed.
By getting past near-term connectivity and convergence priorities, the entire insurance value chain can move forward and innovate. Advancements like artificial intelligence and machine learning automate decision-making, making the process even more efficient and accurate. We’re seeing this begin to take shape around underwriting and claims, but there is tremendous potential for AI/ML to drive distribution workflows. Further down the road, emerging technologies like blockchain can start to serve as a single industrywide repository for all policies, giving agencies and carriers access to shared data within the network. This will truly tear down barriers and bring even greater transparency, productivity and insights to the industry.
There’s often a great deal of debate about who owns the customer relationship. At the end of the day, both the agency and the carrier have a stake and an incentive to provide a seamless experience to the insured. In order to do that, they must collaborate, communicate and share data to make it happen.