Four digital transformation successes in insurance
Success belongs to insurers that have digitally transformed their legacy systems using intelligent process automation.
Lack of innovation is the biggest complaint that risk managers have about the insurance industry, according to Airmic’s 2019 survey. But the good news is that increased digital transformation in insurance is helping some organizations to introduce efficiency, better customer service and general modernization to an industry weighed down by legacy technology and operations. This innovation is critical for today’s large incumbent insurers who are facing a greater threat from new challengers big and small.
Here are some examples of successes that insurers have seen thanks to digitally transforming legacy systems using intelligent process automation:
No. 1: Security and compliance
According to Nasdaq’s Global compliance survey, 92% of firms consider compliance standards highly important. In an industry as intensely regulated as insurance, it’s no wonder that compliance is a top concern. Digitally transforming insurers’ technology infrastructure is an excellent way to ensure compliance across the organization.
One insurer was looking to optimize its legacy peer review system, which was almost 20 years old and had a backlog of more than 500 items. Myriad disconnected systems and communication between employees over email meant it was hard to prove compliance in accordance with Lloyd’s Underwriting Minimum Standards.
The insurer completely rebuilt the peer review system in just four months, improving the quality of review processes by 200% while taking 25% less time. The centralized platform now produces an automated audit trail and relies on automated processes to consistently maintain compliance.
No. 2: Faster operations
The ability to reduce project risk and adjust to market changes quickly are two major concerns in the insurance industry. Legacy systems are often rigid and don’t allow for quick changes that can deliver greater value to both the customer and insurers. But digital transformation in insurance has presented a solution: an automated workflow approach.
Generali CEE Holding embarked on an organization-wide business transformation to significantly boost productivity and efficiency. Making the leap to automated and efficient processes and workflows has delivered immediate benefits for the insurer.
Intelligent process automation enables reuse, meaning multi-country, multi-language deployments become more effective with scale. The initial project cost saving was 60% when compared to other systems. As a result, the project reduced underwriting time spent processing the most complex offers by 50%.
No. 3: Employee productivity
There are never enough hours in a day. Manual tasks such as data re-keying and communicating updates via email can take up significant time. Anything you can do to make your workers more efficient is welcome.
The Asian division of a global insurer recently rolled out intelligent process automation for its claims process. They deployed a workflow solution to simplify the process, then automated the validation, assessment and ultimately the approval of a claim.
The automation of manual tasks involved in the process, such as data entry, Excel calculations and email communications has freed up 15 employees, freeing them to move into other insurance departments and saving those still working in claims 2 hours a day. The automation also ensures compliance by minimizing the risk of incorrect data entry.
No. 4: Visibility and reporting
Complex systems with siloed data pose a major problem for insurers. A recent study found that nine in 10 insurers do not have a single unified view of customer data, yet 70% say that achieving this view is either critical or very important to their business.
Prose-Chile leveraged intelligent process automation to help deal with one of Chile’s most prominent issues: the sustained increase in the rate of uninsured stolen vehicles. Combining a centralized data repository, process automation, improved workflow and integration to the country’s Civil Registry, Chile’s 11 major insurers can now effectively search, discover and recover vehicles in ways never seen before.
A system now used by 90% of the Chilean insurance industry centralized and made accessible online more than one million records. This has resulted in a 17% increase in the rate of vehicle recovery and a reduction of fraud in double pay-outs due to better visibility of claims in the system.
As these four successes demonstrate, insurance has progressed from an age of information in the 1990s to the age of the customer. In many instances, however, it is the InsurTechs that are setting the bar. The onus today is on established, incumbent firms not to get left behind. Digital transformation never stands still, so every insurer should consider adopting an agile approach to digital transformation if they wish to remain competitive.
Gustavo Gómez (gustavo.gomez@bizagi.com) is founder and CEO of Bizagi, a provider of intelligent process automation software connecting people, robots and information.
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