With new variants of the virus emerging, it may seem a bit premature to anticipate the end of the COVID-19 pandemic, but many organizations are accelerating digital transformation initiatives that will drive business forward in its wake. In the insurance sector, COVID-19 has been a wake-up call for the industry’s many digital laggards. But as the global economy slowly begins to recover and insurers adjust to doing business in a new normal, the ability to identify, adopt and successfully integrate drivers of digital change is critical. Here are six important technology levers that will drive digital transformation in the future.
- Automation and AI
To reduce costs and maximize business opportunities, automation is an essential tool for insurers across the insurance value chain. Automation coupled with artificial intelligence (AI) in underwriting processes can help assess risks more effectively and reduce the dependency on humans. By building a service architecture that would allow the collected data to be consumed by an algorithm coupled with AI learning modules, insurers can increase underwriting effectiveness, enable automated risk profiling, create user personas and predict buying behaviors in order to “guarantee” an effective sale. AI helps underwriters uncover nondiscrete data points that provide for another layer of unstructured assessment beyond the traditional approach of underwriting risk based on risk class and historical losses.
At the other end of the value chain in claims processing, insurers will eventually be able to automate the entire claim adjudication process. For example, claim applications can be proactively integrated with systems or solutions that provide additional information, like travel schedules, so claims for flight delays can be rapidly processed with minimal manual intervention. In the face of limited information from the claimant and third-party systems, this method cuts down on waiting time and improves the overall experience for insurers and customers. Furthermore, to facilitate this process, mobile apps can be developed to help the claim logging process and allow insurers to upload the required documents without worrying about physical verification from adjusters or surveyors.
One particular AI technology, robotic process automation (RPA), gives businesses a respite from remote employee governance. RPA solutions, once designed and implemented, need minimal supervision and allow workers to continue serving clients without compromising the quality of services or data being captured. Most importantly, when the workforce is unavailable or in short supply, automation of regular tasks through RPA and machine learning (ML) and the provision of virtual assistance through conversational AI can process increasing business volumes that otherwise may have been lost or delayed.
- Low-Code/No-Code Platforms
Low-code/no-code platforms empower organizations to build applications significantly faster than traditional coding methods. As the demand for faster implementation skyrockets, these solutions can play a vital role in helping insurers update existing underwriting, claims and billing processes quickly and cost-effectively, and without the time, pain and expense of an enterprise rip-and-replace initiative. Putting application change management in the hands of business professionals, with little or no IT intervention, gives the business an added degree of agility, flexibility and speed when responding to market changes such as a pandemic. Applications can be changed in a matter of weeks rather than months. Businesses can introduce changes such as bulk endorsements to add new coverages or exclusions on the go or controlling policy issuance in situations where another catastrophe is imminent.
- Insurance Portals
By leveraging the virtual marketplace model, insurance portals can continue to grow and provide services while physical markets are under restrictions. Insurance portals reduce the overall business impact, thereby offering relief to the insurance world and supporting its sustainability. Potential customers, brokers, insureds or claimants can connect with insurers via portals for various services, such as servicing existing policies, generating new quotes or policies, filing claims, or paying a premium.
- Virtual Agents
To address a shortfall in human resources (particularly in offshore markets), insurers can deploy virtual agents to handle the bulk of repetitive work for customer service segments. This reduces the dependence on insurance companies or brokers. Tasks such as processing claims, resolving client queries, or selling products or offerings to potential clients can be handled optimally by virtual agents and chatbots designed specifically for the purpose. These tools can ask relevant questions, identify clients’ needs and resolve issues quickly. Humans will only need to intervene in exceptional cases.
Drones have several useful applications for insurance organizations. For starters, drones significantly reduce the need for surveyors/inspectors to inspect a location or situation physically, can survey hazardous areas, and provide photographs to help assess risks. In the case of claims, drones can survey loss locations or items and share the gathered data to conduct investigations. With the imposition of global curfews, lockdowns and quarantine zones, drones show tremendous potential.
- Cloud Technology
Remote working is now the norm across industries, and cloud computing is its primary enabler. Using cloud, companies can enjoy easy, secure and physically safe access to IT-based services, including infrastructure, applications, platforms and business processes. Cloud-based technologies allow IT teams to respond faster and more effectively to the company’s changing needs while also creating new services and opening new markets, all from the safety of remote working locations.
Platform-as-a-Service (PAAS), Infrastructure-as-a-Service (IAAS), and containerization have become essential cost-savers for insurers and combined processes during fluctuating business conditions. Insurers can modify cloud infrastructure to scale up or down in response to changing requirements. This helps deploy changes quickly and in an agile manner to tackle any complications. It also helps with cost optimization.
While experts predict this pandemic will not be the last, learning from this unprecedented experience and making small adaptations to existing business models will guarantee sustainable business continuity for organizations. With a keen eye on future-forward innovation and technology advancement, more options can be added to this ever-growing list. With the benefit of hindsight, businesses can now face the challenges of future crises through pre-implementation and dedication to the digital transformation of operations.