The future of insurtech is straight-through processing

It didn’t take long at all for technology to raise the stakes on insurance providers’ customer experience. Consider this: The ability to file an automotive claim with a smartphone camera, which was the stuff of fantasy not long ago, is now nearly ubiquitous across top carriers.

In today’s marketplace, insurtech providers compete based on their ability to offer a solution that speeds up a customer process that was historically slow: How fast can we process the claim? How quickly can we assess the damage? How quickly can we get an answer?

It’s about speed, speed and more speed.

But as insurers incorporate more technology solutions into their offerings, the margin of error will only shrink between competitors when it comes to providing the best customer experience. And as this margin of error continues to shrink, insurers that can offer the most efficient, straight-through processing — a seamless start-to-finish customer experience — will ultimately win with consumers.

The current state of insurtech offerings

If you look at the pool of insurtechs on the market, there are offerings that promise to boost the efficiency of various steps in the customer experience for insurance carriers.

Let’s take a look at a few examples:

• ProNavigator: Software that helps insurance agents access pertinent and relevant information for insurance-specific customer questions to provide answers in real time.
• Armadillo: A tech-forward company that works with insurance agents to make home warranty claims completely digital, enabling homeowners to quickly connect with service technicians in the event appliances or systems break.
• Safekeep Claimflo: A solution that uses artificial intelligence (AI) to analyze claims and related data to determine potential for fraud and subrogation, helping optimize a typically arduous process between insurers.
• ai: Analytics tool that leverages artificial intelligence (AI) to analyze information such as aerial imagery, permits, transaction, weather and sensor data to generate property intelligence insurers can use for faster risk modeling and pricing quotes on individual homes.

While these are just four insurtech examples, they share a commonality: They are all point solutions. And while point solutions provide a lot of value to carriers in optimizing the customer journey, they only fulfill one step of the process.

This dynamic leaves insurers in a quandary. Customers want more efficiency in their experiences across the insurance industry, from home to automotive. However, most insurtech point solutions currently on the market use different operational systems and proprietary technology, making it difficult to integrate each offering into a single customer experience process.

There are many great point solutions on the market, but there’s still room for improvement in the digital customer experience for insurance. My company, Mobiquity, studied the friction points of insurance mobile apps and found that many are falling short in claims processing, flexibility, payments and even basic capabilities like login.

The bottom line: If insurtech solutions can’t be strung together into a single thread for customers to follow, then efficient straight-through processing can’t be achieved — creating the potential for ongoing friction.

Putting it all together

There’s one crucial step the insurance industry needs to take in creating efficient straight-through processing — putting disparate insurtech point solutions together into a single start-to-finish customer flow, ideally in an instant. For example, if you get into an accident, you could use an app to assess the damage, get paid for the estimate and alert a tow to take you to a preferred garage — all at the same time. No insurtech provider offers a comprehensive straight-through processing tech solution and no carrier has developed its own proprietary straight-through processing platform for more than the smallest types of claims (e.g., Lemonade paying self-reported losses on a renter’s insurance claim).

However, just because there isn’t an offering currently available doesn’t mean there won’t be one eventually. In fact, I think a straight-through processing platform is the next big insurtech development. And insurers who adopt a solution that can pull together their entire customer experience and minimize friction could raise the customer experience standard in a revolutionary way.

So, who can bring everything together? I think there are two likely parties that could eventually bring a straight-through processing platform to market.

• Cloud-based insurtechs: In addition to insurtech point solution providers, there are cloud platforms specifically geared toward insurers such as Guidewire and Duck Creek to manage the core business and companies like CCC to manage vendor and supplier touchpoints. With many insurers operating on legacy systems, these platforms act as a liaison between insurers and insurtech, enabling insurers to convert from on-premise legacy systems to the cloud so they can better leverage insurtech solutions. We’re already seeing each of the three platforms mentioned gearing up to possibly develop a straight-through processing solution. Guidewire, Duck Creek and CCC have each made acquisitions of other insurtech companies over the past few years, laying the foundation to potentially bring one point solutions together. 
• Large insurance carriers: As my company’s CEO Andy Norman has predicted, many enterprises across all industries will likely shift their operations to be tech companies first — and this includes large insurance carriers. Large insurance carriers bring large investment dollars. And like cloud-based insurtechs, they are pouring funds into tech solutions.

Players like State Farm, Allstate and Nationwide have dedicated funding to acquisitions of insurtech companies and/or investments in insurtech startups. While investments help these companies stay competitive with insurtech carriers like Lemonade and ROOT, they also enable them to develop their own proprietary straight-through processing system.

Insurtech has come a long way over the years, but its biggest innovation is still to come. Straight-through processing is the future of insurtech — it’s the key to reducing friction on the digital platforms insurers use and creating a seamless customer experience.

The only question that remains is which players will ultimately roll out solutions. The seeds are being planted by both cloud-based insurtechs and large insurance carriers to develop a straight-through processing platform, and only time will tell on who takes the leap first.

Brian Levine (blevine@mobiquityinc.com) is vice president of strategy and analytics at Mobiquity. These opinions are the author’s own.

Also by this contributor: How digital insurance tools affect generational brand loyalty