Digital transformation is no longer optional for insurers
Data management is a critical component in unlocking insurance data’s maximum value.
To make data-driven decisions, insurers must keep up with rapid data generation. The sheer volume of information insurance companies collect from their policyholders continues to increase, leaving insurance professionals overwhelmed. This might be why: On average, insurance companies only review 60% of the data they need to underwrite policies. Bain & Company reports that the other 40% is never collected or the collection process occurs too late. As a result, less-digitized insurance providers are facing fraud risks, losing customers to their competitors and missing out on more efficient ways to leverage their data.
There is, however, a solution: digital transformation.
For years, the insurance industry has struggled to keep up with stacks of paperwork on executives’ desks. It is no longer a feasible model for insurers to manually review, copy and scan documents. Manual processing is equally ineffective at retaining customers, whose experience suffers when information is inaccurate and wait times drag.
Digital transformation replaces dateless processes with digital data collectors. For example, unified data platforms can help insurers make data-driven decisions more effectively by integrating and organizing an entire company’s datasets in one place. But these platforms don’t just throw your information into virtual paperwork stacks. Instead, with master data management technology, these systems can organize your insights and deliver data-rich applications that are personalized to your organization’s needs.
In addition to organizational methods, digital transformation platforms can automate the data entry process. This allows insurers to use their free time to assess and analyze their cases, and to achieve more accurate results.
We know digital transformation is necessary — but company decision-makers must carefully consider how their decisions impact their business, employees, clients and stakeholders. The insurance industry needs to explore technologies supporting its growth to continue scaling. That means CEOs must ask themselves three questions when making decisions about digital transformation:
1. How is my decision going to impact my team?
The American Association of Insurance Services (AAIS) learned firsthand how digital transformation technologies could increase efficiency and productivity. As a result, the organization worked to improve its intricate data communication system. Storing millions of records, AAIS needed a flexible and configurable interface to support their demanding business users.
By marrying a data management platform with the company’s back-end systems, AAIS improved its control of products and associated reference data. They were also able to automate their previously manual tasks and enhance their customer-facing interface by centralizing important user information.
As a result, AAIS saw a 75% increase in efficiency, reduced affiliate implementation times by over 85%, and confidently took ownership of their data. That’s a pretty positive impact on the team.
2. How is my decision going to improve our business’ workflows?
APRIL stepped up its data management game via digital transformation strategies. Established in 1988, the international organization works in 16 countries across Europe, Asia and the Americas. While its services are wide-reaching, its challenges are just as global. For example, APRIL needed to aggregate its subsidiaries’ customer and prospect data into one efficient database. It also needed to consolidate this information and improve its data quality.
Their work with a master data management platform combined many solutions. First, they used the platform’s flexible design and deduplication engine for more agile data input. Then they streamlined the organizational model for datasets, allowing APRIL to ensure privacy, legal constraints and obligations concerning their information. Thus, the data management platform became the company’s centralized place for all data. It simplified insurers’ analyses of customer information, supporting the efforts of the customer service, marketing and sales departments. By prioritizing digital transformation, APRIL made significant strides in its business workflows.
3. Is my decision creating any risk for my company?
Looking at AAIS and APRIL, it is clear that the decision to implement digital transformation tactics reduced risk for the companies. Each business took control of its data, finding solutions to increase efficiency, decrease the chances of information inaccuracy, and simplify its processes for all parties involved. But this question is still crucial for leaders to consider, as any decision that increases risk in any department can have a ripple effect — and even if you choose to increase risk elsewhere for efficiency, it is vital to implement more safeguards.
For insurers asking themselves these questions, consider that digital transformation will only add value to your services and create opportunities. So don’t let your company fall by the wayside. Instead, invest in digital transformation and reap the benefits before you have to catch up to everyone else.
TH Herbert is the CEO of Semarchy. Before assuming the position of CEO in 2021, he was the COO and sales leader for Semarchy. Prior to joining Semarchy, he was managing partner at SWG LLC, and held leadership roles in sales, product and technology roles in several other successful companies.
Opinions expressed here are the author’s own.
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