10 Most Disruptive Technologies for P&C Insurers
The increasing adoption of larger sets of core business applications is being driven by a number of factors; single-vendor, best-of-breed options are expanding with market consolidation, implementation is becoming safer with experience, improved technical foundations for products, new delivery options (such as hosting and SaaS options). This adds up to an agility and flexibility that legacy systems will find increasingly difficult to keep up with.
Profitability and productivity. As a central point of data aggregation, collaboration and decision-making, underwriting processes are under a lot of pressure to operate fluidly, effectively and transparently. Most important is providing a platform for data analytics, where decisions can receive automated supportif not full-on automationas well as performance assessment and financial impact of decisions. This requires data management efficiencies and new tools, as well as collaborative, transparent processes. As the fulcrum of business operations, underwriting looks to garner continued technological advancement.
While traditional BI tools are fairly common, analytical and location intelligence tools are still lacking. While promising tangential improvements in areas such as underwriting and claims, the use of location intelligence also offers unique capabilities for property lines. The untapped potential of data could also touch modeling, agent operations, customer intelligence, internal assessments, etc. Analytics promises increasing rewards with the maturation of an insurers capabilities, which should keep focus and investment in data fixed.
Historical data analysis, pattern recognition and modeling present another avenue of data management promising insurers a lot: risk avoidance, proactive customer service and relations, improved underwriting profitability and the ability to project losses. While competitive advantage is currently sought by investment in such capabilities, in a few years, it is likely to be the norm among competitive insurers.
Adoption is still lagging when it comes to fraud solutions, but in upcoming years, the reduction of losses through fraud is likely to work its way into insurers' priorities. Most notably, updating fraud detection software allows insurers to identify fraudulent claims in real time, whereas current detections running in batches occur after the point of data entry, too late to effectively take preventative measures. As the market for fraud solutions matures, investing in a proactive approach will likely pay for itself.
These new online communities mostly remain enigmatic for insurers. While representing significant competitive advantage via an ocean of consumer data and a business portal with no well-worn path to success, insurers content with playing wait-and-see are likely going to pay for their patience. While the waters have been tested, the potential these consumer communities are waiting to yield is becoming increasingly hard to ignore.
Speed to market, improved quality, pricing accuracy and better fitting customer needs and expectations are the primary reasons insurers are investing in product life cycle management and implementing tools to make the rules and content of products more accessible. With that, many large insurers have also recently begun removing complexities from products. The smaller and more efficient products are, the easier and quicker they are to work with for both customers and IT staffs. As products become easier to group and standardize as a result of product configuration, some insurers have started initiatives looking into assembling a product chassis, the next step in product simplification and efficiency.
Interest in telematics has become widespread within the last 24 months, hinting that pay-as-you-drive options will likely become a main attraction for low-risk customers within a few years. Aside from competitive advantages gained, telematics also offers the potential to reduce risk and, therefore, decrease claims losses. With that, telematics has the potential to drastically reshape the industry; any insurer not researching deployment or carefully observing the market and consumer thoughts on data privacy is likely to be left behind.
While the Internet has become a core component of operations and having customers conduct transactions themselves can drive down costs, portals and interactive web experiences also put the onus on insurers to maintain this consumer-centric model. Especially with up-and-coming generations, the demand for efficient, customer-friendly online interactions and transactions will need to be a top priority.
One aspect to the digitalization of business is the proliferation of mobile for both internal and customer use. Demand is likely to soar in the years to come, and the technology is not fully realized yet. Therefore, insurers are jumping into the game. A developed mobile portal can appeal to younger consumers more comfortable with the devices, but these consumers also are more demanding. As insurers become aware of the myriad capabilities (viewing policies, policy inquiries, paying bills, filing claims, finding agents, quick notifications/updates), they are likely to continue to invest in the maturation of this portal.