Technology is streamlining and transforming insurance towards customer-centricity

Seamless provision of relevant third-party data (3PD), the replacement of custom coding with Low Code No Code, migration of legacy to the cloud, and the shift from paper-based to digital is creating massive change in insurance and is beginning to become the norm for our industry.

The insurance industry is working towards the pursuit of customer centricity by incorporating technology into its operations to ensure customer satisfaction. As of a few years ago, most states required a wet ink signature to accept and bind an insurance quote. Today, only one state does not allow electronic consent and even that is rarely enforced. This proves that the industry that was previously filled with long processing times is now changing to make buy journeys shorter and provide more flexibility to customers.

In fact, still today, the vast majority of online insurance searches and quote journeys end with a phone call to the carrier – whether it be because of lack of integrations, customer concerns, or underwriting desires. The increasing ubiquity of digital purchasing in other sectors is quickly removing customer concerns leaving the insurers and their technology as the remaining hurdle preventing fully straight-through insurance binds and purchases.

Expediting the underwriting process

Underwriting used to be primarily driven by relationships, human skills, and manual data collection and interpretation. The main source of data for underwriters was forms and back-and-forth emails with the customer which would go on for weeks. Now, third-party data providers can provide the necessary data for risk assessment. Through APIs, the data can be accessed in real time and inserted into the workflow. No-code tools allow for business rules to be structured quickly by business leads, and implemented rapidly, allowing for responsive workflows for the underwriters which makes the 3PD somewhat personalized.

Having access to granular data about each customer allows underwriters to assess the risk based on the customer's unique risk profile. This personalized approach to risk assessment results in more accurate and fair pricing for customers. Moreover, access to customer data enables insurers to reduce cases of adverse selection, wherein policyholders possess more information about risk conditions than the insurer.

Working hand-in-hand with partners

When working with agents and brokers, it becomes imperative for carriers to respond quickly to submissions. Developing a positive relationship with partners can give underwriters a strategic advantage over competitors.

Often, submission details are presented in an unstructured format across various documents, requiring manual and repetitive efforts from underwriters to organize the data. Consequently, underwriters may spend more time gathering application details from various sources rather than on risk assessment.

By integrating Gen AI tools, submission details and ACORD form data can be analyzed and extracted directly from the underwriter's inbox. This automated process transforms the unstructured data into a quote journey. As a result, underwriters can optimize their efforts towards developing stronger relationships with partners rather than on manual re-keying of data.

Gen AI tools can also assist brokers and agents in understanding the carrier’s risk appetite. Predictive models based on the carrier’s past data can help brokers and agents develop recommendations or risk scores for submissions to identify the right fit for a customer’s risk profile that aligns with a carrier’s risk appetite.

Exploring new product opportunities

Shifting all transactions and data gathering to electronic formats allows for the quote-bind-issue process to be turned into an API-based widget that can be inserted into an existing digital journey and experience. Insurance is rarely an enjoyable or a frequent topic and decision but inserting it into other more enjoyable buy journeys, for example, buying a car or frequent purchases such as booking an airline ticket, allows customers to pair the activity with the risk payment which may also help with risk mitigation and loss control.

The insertion of an insurance widget into some other digital experience can also split up insurance into bite-sized chunks as in pay-as-you-use insurance. Through telematic devices, underwriters can access real-time data for continuous underwriting. Plug-in devices can be inserted into cars to track driving behavior and distance covered for pay-per-mile insurance, allowing customers to pay a personalized price that reflects their own behavior and is proportional to their individual level of risk.

Speedy product creation and launch

Previously, the timelines for creating and launching a new product could take up to 2-4 months, and depending on the complexity of the product it could take even longer However, these timelines are no longer viable. Carriers must ensure rapid product launches while maintaining the flexibility to make product adjustments. With Low Code No Code platforms carriers can now shorten development timelines and products can be launched and distributed in weeks, depending on regulatory requirements.

Technology has provided carriers with the flexibility to test their products by launching new variants as per customer and market requirements. Carriers can no longer rely on a singular product launch; instead they must test their products in the market, understand customer needs, implement the changes and relaunch the product variant. This iterative cycle of testing and launching allows the carriers to establish a product market fit.

Technology is playing a pivotal role in transforming the insurance value chain and driving growth. As carriers continue to invest their resources in technology to become more user-driven and agile, they are better positioned to meet the evolving needs of customers and the market. However, this requires a fundamental shift in mindset among carriers. They must be willing to embrace change and continuously transform to meet market requirements. Carriers must think swiftly, prioritize future-proofing their technology infrastructure, and adopt a customer-first mindset. Embracing technology as a driving force for innovation and customer satisfaction is not just a choice but a necessity for carriers in the digital age.