Four technology trends for insurance CIOs to watch
Separating insurtech ‘hits’ from the hype is critical to successful implementation.
Business transformation is driven by a shift to digital and tech developments that have proven to raise efficiency, effectiveness and satisfaction among stakeholders. In fact, according to an executive survey by Accenture, more than 60% of insurers feel technology has had a positive impact on their underwriting processes. An even higher percentage feel it will significantly affect risk management, distribution and finance.
Still, there’s a lot in this realm for executives to consider, particularly chief information officers (CIOs), and some areas show more promise than others. To sort the “hits” from the hype and pinpoint the most impactful, we’ve identified the following four tech trends in insurance that CIOs need to keep an eye on (along with a few tips).
1. Pivotal digital
Many insurance companies feel digital transformation is pivotal to improving their business. But tackling sweeping change requires the support of top executives. In Accenture’s survey, 43% of the insurer executives agreed that change management expertise is critical to success.
The reason for this is to present the best business case possible for digital adoption. Foremost, that means prompting the C-suite to take a leadership role and demonstrate they’re actively behind the move. It would also help to enlist managers to advance efforts while educating and encouraging employees to take advantage of digitization.
That said, consider a digital adoption platform (DAP) with a dashboard that overlays commonly used apps while guiding users and facilitating system changeovers. Giving users tools they are familiar with can make work easier, reducing friction and encouraging greater adoption.
DAPs can be customer-facing, too. They’re particularly useful for identifying and rectifying pain points while reducing support requests. They can also offer on-demand training and self-guided experiences to make adoption even more effortless.
2. Dream machine
There’s a lot of data in insurance and machine learning (ML), a subset of artificial intelligence (AI), offers powerful ways for a company to leverage it. ML uses algorithms to identify patterns and extract valuable details through inference and not actual knowledge. This can allow insurers to provide faster, more personalized service, including suggesting offerings that might be needed, fast-tracking messages from insureds to the correct department and speeding claims.
Simply put, data can make dreams come true – and ML helps process larger volumes of it with much less time and effort.
ML is useful for back-office purposes as well. Paper files can be quickly scanned, digitized and categorized to create a database to support more personalized insurance plans and better risk assessments. Efforts on the customer side can also be reduced with ML. It can be used with chatbots, self-service models, mobile apps for filing and policy changes, and more.
3. Ahead in the cloud
The Accenture study notes 63% of insurance companies believe cloud-based technology for improving operational efficiency is having the most positive impact. Typical cloud integrations range from replacing on-prem solutions with software-as-a-service (SaaS) in part or entirely, reducing or eliminating paper with custom mobile apps and migrating non-critical data from datacenters to the cloud.
The cloud vastly expands the amount of data that can be stored, and it does so cheaply, especially in contrast to purchasing and maintaining physical hardware. It also improves accessibility by enabling anyone with the right permissions to reach data and apps on various devices regardless of where they are located. Users can collaborate and share information with peers in real-time cost-efficiently, too.
The use of the cloud is proving crucial for business transformation in insurance. In particular, managed services providers (MSPs) — specifically those focused on sectors such as insurance and financial services — are gaining attention for their SaaS offerings. The approach can offer such benefits as eliminating on-site IT maintenance, easy and cost-effective scalability, infrastructure based on proven technology and more.
That it has handled the great remote migration of the pandemic is testimony to its future importance.
4. Fraud fighter
Fraud has long been a challenge, regardless of the segment of insurance in which a company operates. Now, biometric identification is showing strength as a solution.
Ever used facial recognition or swiped your finger to unlock a device? That’s made possible by a biometric sensor, which can turn a biometric trait of a person into a digital image. That data can also be converted into an electric signal sent to and used by an authentication system to verify identity.
In healthcare, biometric identification can confirm patients not only with facial recognition or via fingerprints, but iris scans can be used as well. This can help prevent insureds from sharing insurance cards, keep stolen data from being used by third parties for services, and maintain cost control over providers charging unnecessary or never-delivered tests or services.
The business transformation offered by biometrics can reduce health insurance fraud by providers, patients, cybercriminals and scammers. And it does so while helping to unite medical records across systems for improved patient care.
Choose wisely
CIOs in the insurance space have a lot on their plates, and this is especially true with the pandemic driving the increased use of digital and cloud solutions. Now, as the dust settles, its transparent processes will change across industries. This also means realigning technology.
The time to focus on digitization, modern approaches to IT and the flexibility to support shifting workforces is now. When doing so, focus on these areas and choose wisely. They could very likely be the key to your company’s business transformation success and future.
Nathan Dionne is the vice president of digital transformation for ECI. Contact him at ndionne@eci.com.
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