P&C insurance technology trends to watch in 2020
In 2020, carriers will challenge all of us to rethink the possibilities of delivering and servicing insurance in the digital age.
This year, 2019, was a banner year for P&C insurers, as it was for many of the insurance ecosystem’s key players. In large part, this was due to the industry, which many once labeled as laggard and slow to innovate, making a strong commitment to truly evaluate and strategize around emerging business models and digital-first strategies.
Most importantly, carriers showed a new vigor when it came to meeting and exceeding customer and agent expectations. In fact, according to Strategy Meets Action, 75% of new core system deals in 2018 were for cloud-based solutions, and 2020 is likely to reveal similar trends.
What follows are the technologies and trends that warrant reflection from the past year in P&C insurance, and a look at the factors that will continue to drive this movement in 2020 as carriers continue to show confidence in an industry truly realizing its potential through digital transformation.
Accelerated SaaS adoption
Just as mainframe solutions and home-grown software gave way to web-based on-premises systems, SaaS truly arrived in 2019 as the chief next-generation delivery model for insurance.
Today’s savviest carriers are applying new strategies and technologies that business users (as opposed to developers) can work with to make innovative concepts reality in short order. All of this is done without the need for massive IT investments. These insurers are launching new products, expanding into new geographies, and introducing entirely new business models faster than ever.
According to a recent report from Novarica, the average speed to market is now seven months for new products, and three for modifications. These times are broadly similar across lines of business, and they’re shrinking fast. Carriers are realizing that this speed is opening the doors to possibilities and necessary innovations to forge ahead with the products and experiences that customers demand.
This trend will continue in 2020, as carriers pursue new opportunities, create differentiated customer experiences, and deliver innovative insurance products that require speed and agility that legacy systems simply have not been able to deliver.
Growing the InsurTech ecosystem
From motor vehicle reports and address validation to bureau circular content, replacement cost estimates, and flood hazard metrics, there is a staggering amount of third-party data now available to carriers. Accessing and applying this growing volume is critical, but also means carriers have more to integrate and maintain.
To assist carriers with this volume, SaaS vendors have productized third-party integrations and bureau circular updates, removing the time and risk of developing custom integrations in-house. For carriers, this also means that vendors handle ongoing support and maintenance; whenever a third party makes a change to its offerings, the vendor promptly triages the issue and updates the integration, so core systems stay up to date and calling the latest data.
What this means (and what is truly exciting) is that carriers no longer need to pick and choose a select few partners to integrate with. This will be an increasingly interesting area to watch as carriers truly expand the boundaries in which they operate – and the data each is able to leverage to solve emerging industry problems and insure new lines that could not have been imagined even a few years ago.
Increased reliance on touchless claims
The modern insurance claims process is increasingly complex; more variables and data are constantly coming into play, and carriers must determine appropriate settlements and flag potential fraud faster than ever. On top of technical challenges, insurers are dealing with their customers during stressful and vulnerable moments; times when the delicate balance of empathy and automation must be struck in order to give insureds the peace of mind they seek.
“Insurers are doing a great job at the critical customer touch point of claims reporting, but the end-to-end claim process is still costly and not as fully integrated as it needs to be,” said David Pieffer, Property & Casualty practice lead at J.D. Power, while introducing a recent report. “The challenge for insurers is to seamlessly transition the claims reporting function to more cost-effective digital customer care solutions.”
Today, handling claims is a mostly manual process that relies on adjusters’ individual experience and expertise to manage customer experiences and vendor networks. But as carriers continue to invest in digital experiences, data analysis capabilities, and technology ecosystems, the claims process will become more automated and pattern-driven. As a result, it’s predicted that carriers will make significant improvements in the realms of customer satisfaction, operational efficiency, and accuracy.
PaaS: Insurance innovation accelerates
Platform as a Service (Paas), or a cloud computing service that lets developers create applications using built-in software components like search functionality, has captured the attention of many folks in the industry.
PaaS opens the door to cloud features such as scalability, high-availability and multi-tenant capability. This is important, as it allows vendors to introduce or upgrade the functionality of their platforms faster than ever, reduces the amount of coding that developers must do to create P&C insurance applications, features, and updates, and allows their IT teams to focus on truly differentiating features that set them apart from their competitors.
For example, Microsoft Azure’s PaaS services provide a framework that developers can build upon to develop or customize cloud-based applications rapidly by focusing exclusively on non-standard functionality unique to the insurance industry.
So, there you have it.
These are the technologies and trends I’ll be keeping my eye firmly fixed on in 2020, as carriers challenge all of us to rethink the possibilities of delivering and servicing insurance in the digital age. I’m excited to see where 2020 takes our incredibly important industry — and the problems we can help solve.
Andy Dey (andy.dey@duckcreek.com) is chief product and technology officer at Duck Creek Technologies. These opinions are his own.
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