Staking a claim in operational resilience following COVID-19

While reflecting on the one-year anniversary of COVID-19 in the United States, it’s easy to see this past year has been challenging in unprecedented ways. The pandemic spared no industry from COVID-19′s impact, and the impact on insurance is notable.

Business and economic disruptions hit the insurance industry, just like every other. But insurers also saw catastrophic events linked to climate change upend historically reliable risk models. While these events exposed the vulnerability of insurers, they also revealed the opportunities for insurers to elevate business performance.

One lesson from the past year that resonates strongly with the insurance industry is the importance of operational resilience. New global Accenture research found more mature operating models within the insurance industry benefited greatly given their ability to reduce costs due to remote working and increase digital customer acquisitions. Further, the research found the insurance industry is more advanced than other global organizations when it comes to agility and resiliency.

Fortune favors the future-ready

While most companies focus on small improvements, organizations that we define as “future-ready” drive wholesale operational reinvention. These leaders aren’t afraid to rethink how work actually gets done across technology, processes and people. As a result, these organizations deliver three-times higher corporate profitability compared to organizations at lower maturity levels.

In the insurance industry, these “future-ready” leaders know the role of operations within their business isn’t just focused on cost efficiency; operations should drive growth and value. This is more important than ever during a time when there’s a premium on new, agile ways of doing business. Of the 13 industries we surveyed, insurance respondents reported higher levels of operational maturity. Today, one in ten insurers say they have reached the threshold of future-ready operations, compared to cross-industry averages of 7%. Three years ago, no insurers identified as future-ready.

Building resiliency in challenging markets

While there are pockets of operational innovation in this industry, insurers still have significant improvements to make to build real resiliency. How can the 90% of insurers who are not future-ready begin their digital transformation journey?

Start with making stakeholder experience your North Star. Customer experience cultivates loyalty. Employee experience drives retention and acquisition. And partner and supplier experience fuel a strong ecosystem. This is why insurers must make elite stakeholder experience their “North Star” — helping to shape the goal for their reinvention strategy.

Bring business and technology together. Advancing the operating model through technology is about more than the technology itself. Technology is an enabler for insurers here — a means to change. Progress happens when business and technology come together through joint governance models, aligning and integrating ecosystem partners and co-creating the strategic roadmap so that technology investments align with business strategy. Just 15% of insurers are doing this today, while 53% plan to do so in the next three years (among future-ready leaders, it’s as high as 83%).

Automate at scale to augment human talent. Scaling automation isn’t about cost reduction; rather, it maximizes the human skills that distinguish us from machines and shifts higher-value tasks to people to make work more satisfying. The insurance industry has made great strides in automating manually intensive and repetitive tasks. For example, systems ingest incoming mail with optical character recognition technology, AI and natural language processing.

In addition, insurers are using robotic process automation to streamline workflows and repetitive processing steps. Three years ago, just 20% had widespread or full-scale use of automation. That number has rocketed to 71% today. Insurers expect it to hit 95% in the next three years — with 45% scaling adoption across all business processes.

Scale AI across the enterprise with cloud. Improving their ability to scale AI is a key opportunity for insurers to make different — and better — use of data. AI gets smarter over time in ingesting data and determining the relevant information to extract to improve decision-making in underwriting and claims processes.

The good news is that 43% of insurers have fully adopted AI and data science capabilities. This is a six-fold increase from 7% just three years ago. Insurers can improve core processing accuracy and efficiency with AI-powered advanced data and analytics platforms. As insurers look to scale AI further, the cloud can boost momentum. Cloud costs have decreased consistently over the last five years, and security and regulatory compliance offer strong controls. There is nothing like the cloud to help insurers scale automation and AI while reducing legacy technology debt.

Build complementary ecosystem relationships. Fifty-three percent of the insurers we surveyed say that ecosystem relationships have improved over the last three years. Having an ecosystem of partners brings in more diverse data, specialized skills and leading-edge technologies as well as new ideas that spark innovation. Insurers can access all of these things through trusted partners rather than having to make costly and time-consuming investments to support the capabilities themselves.

How a top insurer boosted claims operations

To improve its service quality and reduce claims costs to industry norms, a leading insurer wanted to engage with a strategic advisor and managed service provider to establish a centralized intelligent insurance U.S. operating model.

To quickly upskill agents, centralize processes and increase productivity, the insurer introduced standardized tools and processes along with dozens of automations and minibots. By eliminating manual and repetitive administrative tasks and introducing analytics, employees have new confidence and are making better and faster decisions. The insurer is introducing a new claims management platform that is expected to dramatically impact productivity and the team’s ability to deploy even more intelligent technologies such as virtual assistants, medical analytics and real-time management dashboards.

The bottom line

Insurers don’t have the luxury of status-quo operations. So much is changing so fast for them that falling behind competitors is a real risk. To keep up with what’s happening — in markets, with technology and across all stakeholders — ways of operating need to continually adapt to changing needs and fast. Newly designed processes should mean that interactions feel simple and consistent at every touch point and services are accessible anytime/anywhere. When insurers do this right, technology augments people and improves experiences for customers and employees.

Manish Sharma (manish.sharma@accenture.com) is group chief executive of Accenture Operations and is a member of Accenture’s Global Management Committee. In this role, Manish leads a team of over 145,000 professionals and oversees Accenture’s comprehensive portfolio of operations services for specific business functions, such as finance, procurement, supply chain, marketing and sales, as well as across various industries. He joined Accenture in 1995.

See also:

• Consumers want automated AI auto claims & repairs
• 5 key ways to automate insurance sales workflows
• Focused on efficiency: 10 insurance industry trends to expect in 2020