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INTELLIGENT INSURANCE: WHY PROCESS INTELLIGENCE IS THE BACKBONE OF AUTOMATED UNDERWRITING

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By Neil Murphy, Global VP at ABBYY

 

There are still many industries that are document and paper heavy in their processes and the insurance industry is one of them. It’s certainly true that prior to the pandemic, digital transformation was well underway in the insurance industry, but the last year has accelerated the need for technology and it has shone a light on the importance of insurers taking a new digital approach to underwriting.

To be frank, paper forms in today’s digital world are archaic, why should insurers be filing through documents when intelligent automation can do the job for them? One thing’s for certain, continuing to use manual processes will not drive the level of profitable premium growth that insurers need to thrive.  Even for companies who were already working in the modern era of automated underwriting, there were many processes that fell through the cracks. As a result, insurers have had to pivot to manage virtual interactions and exchanges between all stakeholders in the process. In fact, Deloitte forecasted that, post-pandemic, historical data may be less valuable to the underwriting process, insurers might face unexpected spikes in claims, and insurers who take an agile approach to risk assessment might be more resilient than those who do not.

This is where process intelligence comes in: it can help insurers see their processes in real-time, spot bottlenecks, and identify where data is missing. So, how can insurance leaders make the most out of their technology investments to accelerate their underwriting transformations?

 

Neil Murphy

Embrace document AI

Automated underwriting within itself is nothing new, and while it’s a step in the right direction and can process lots of data at once, there is still a large amount of content that is creating vulnerability. In turn, cracks can form in the system. In fact, since the pandemic, there have been several examples of gaps and broken processes that have emerged. One insurance carrier, for example, focused process automation on improving the customer experience, while gearing up for automation at scale. However, when employees began working from home, operational processes supporting critical outcomes became difficult and many were simply broken.

Insurers are flooded with copious amounts of data in various forms every day. As soon as data enters automated underwriting – whether for personal lines, commercial, or life – it feeds into many manual processes. This can result in a delay in the process, an incorrect decision, or both. In today’s digital age, companies may have automated systems in place for their structured data, but they lack artificial intelligence (AI) solutions capable of addressing the volume of unstructured data from documents.

With more consumers preferring to engage digitally, there is now an even greater emphasis to accelerate the digitisation of content and business processes across the front, middle, and back office. The significant gap between customer expectations and insurer’s abilities is driving insurers to push for better connections, including their people, processes, and customers.

 

Understand your processes before you start

There is no doubt that digital transformation has revolutionised customer relationships. But the journey is yet to be complete, as many insurers are still struggling to identify which automation technologies would benefit their customers experiences the best. The first step to achieving this is having a better understanding of their current document-driven processes.

This is where process intelligence come in. Process intelligence can help insurance companies gain an oversight into the businesses. This includes discovering in real-time where bottlenecks occur, where repetition happens, where data is missing, and where automation is working or not. It can also see the flow of documents and their data through your processes, identifying exactly where automation – additional technologies like Artificial Intelligence (AI), Robotic Process Automation (RPA), and Machine Learning (ML) – can make the biggest impact. Too often, business leaders simply guess which processes would be best to automate without leveraging real data.

For the best results, it’s more than just one type of technology like RPA tools. By introducing content intelligence, AI that understands documents, combined with RPA solutions, businesses can quickly improve process bottlenecks, strengthen operational efficiencies, and enhance the customer journey. Not only this, but employees can focus on meaningful and creative responsibilities within the workplace, rather than wasting time on admin-heavy tasks. Essentially, content intelligence solutions are now enabling enterprises to make unstructured content more valuable and equip AI-powered robots with the necessary skills and understanding to make intelligent business decisions.

 

Gain digital intelligence

By marrying process and content intelligence solutions together, companies can speedily process a variety of documents while simultaneously automating insurance processes to gain comprehensive digital intelligence. Implementation of intelligent solutions to underwriting can significantly speed up functions such as data collection from both external and internal sites, assessment of loss runs and engineering reports, reviewing the history of customers’ claims and producing recommendations based on previous losses.

By having a strategic, holistic approach in place, insurance companies can reap the near-term rewards across the board and set the pace for the industry for years to come. Looking ahead, the potential for intelligent automation in the industry is limitless.

Top 10

How insurers benefit from digitalisation

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Oliver Werneyer, CEO & Founder, Imburse

 

Insurers need to embrace digital transformation to stay relevant. Customers nowadays are well-informed and expect user-friendly experiences and smart solutions that meet their needs. They are also more demanding than ever, so being able to gain their attention and trust is key to boosting customer loyalty and guaranteeing sales. Delivering an excellent omnichannel customer experience is only possible through the adoption of technology and the optimisation of processes.

Insurers have been facing the pressure to digitalise for a few years now, and it continues to increase. Technology is here to stay, and customers are likely to continue using it for their everyday tasks. The traditional insurance industry as we know it is undergoing a disruptive evolution, driven by customer demand and the rising competitiveness of the industry. To be customer-driven, however, insurers need to place focus on improving customer experience from end to end. This goes from the moment that customers are searching for policies online, to the moment customers file a claim and expect a quick and seamless reimbursement process.

This may not be news to insurers, who are well-aware of the need to embrace a digital transformation journey. However, they are faced with challenges that make it incredibly difficult, if not impossible, to compete with newer, innovative companies that place the customer at the centre of their business proposition. For instance, when it comes to payments, insurers must be able to integrate with various payment providers and technologies so they can offer their customers a wide variety of payment methods, as well as the payment methods that best suit their unique needs.

Oliver Werneyer

While some customers may prefer to receive a voucher for their favourite shop, others may be happy with a bank transfer or a push-to-card payment. Being able to meet customers’ individual needs is crucial to gaining their loyalty, and even more important now that hyper-personalization has become so popular across industries. Integrating with various providers is a complex process, mostly due to insurers relying on old and outdated IT systems that power their entire operations.

These integrations are incredibly time-consuming and expensive and require a lot of internal resources. Insurers don’t typically have these resources available, because they don’t have a dedicated payments team nor the in-house expertise to leverage payments. Equally, the length of these integrations makes it difficult to swiftly adapt to continuous market changes. Speed and flexibility are crucial elements of success and elements that most insurers don’t have.

These challenges can only be solved through partnerships. Thankfully, the Insurtech market is packed with innovative solutions that can enable insurers to solve their most pressing problems. Such companies, for instance, enable end-to-end connectivity to the whole payments world. This means that insurers are able to connect to any payment provider or technology they want, in any market, for both collections and payouts.

Instead of having to deal with lengthy and cumbersome integrations processes, insurers can focus on other key business areas while solutions like Imburse take care of all the heavy lifting. Another key element that insurers must consider outsourcing is expertise. Payments is a niche area and, while crucial to the success of the business, it isn’t considered a core department. Being able to access agnostic payment experts that help insurers navigate the payments world and make the best business decisions is a stepping stone for the successful optimisation of payment operations.

Some of the benefits of embracing digitalisation for insurers include streamlining customer experience and ensuring that customers go through a seamless and quick journey from beginning to end. According to PwC, 80 percent of companies are now investing in omnichannel experiences, powered by the need to ensure customer retention and satisfaction. Customers expect everything to be instantaneous, whether that is finding the most suitable policy for them, making a claim or receiving a payment. Digital insurance makes it possible for insurers to meet and exceed their customer’s expectations, and boost retention and satisfaction. Digitalisation also enables insurers to reduce costs. According to a McKinsey report, automation can reduce claims costs by as much as 30 percent. Insurers can improve their underwriting processes, improve speed to market and generate new revenue streams by, for instance, adopting embedded insurance and partnering with other companies. This will boost sales conversions and lower the costs of distribution.

Large incumbents can more than double profits over 5 years just through digitalisation (McKinsey). These benefits are both in the short and long-term. In the long run, having future-proof systems and processes in place will enable insurers to continue to adapt as the market changes – and it will change. Being able to have this flexibility will prove invaluable.

 

About the author

Oliver Werneyer is the founder and CEO of Imburse. Oliver spends most of his time overseeing the overall operations of the company, but with a strong focus on powering international growth. Before founding Imburse, Oliver held various roles in the insurance industry, with the likes of Liberty Life, Swiss Re and Genworth. He also founded Flynrate, an innovative flight tracking and flight delay insurance app, and became a leading member of London’s startup ecosystem, sharing his industry knowledge and passion for entrepreneurship with London-based startups.

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Turn the data landfill into an insight goldmine

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Andrew Watson, CTO, MHR

Today, businesses have access to a wealth of data, with vast amounts of information created daily. While tools exist to help companies make sense of it and take advantage of the critical insights that data can bring to drive stronger business growth, many organisations are simply overwhelmed with the volume and velocity of data collected. With this, there is also a sense of uncertainty on how best to leverage this to create data driven insights.

Disjointed processes and dormant ‘shelfware’ are keeping a wealth of data stuck in silos – untapped and underutilised. As a result, nearly three fifths (57%) of UK organisations say they believe they are making business decisions based on inaccurate data. Without a clear strategy to guide them, organisations will be running blind, unable to access and get value from the relevant data to make stronger predictions and smarter decisions.

And the longer data is left untouched, and the more of it that is generated, the harder it will be to leverage it to its truest potential. Organisations must urgently recalibrate their relationship with data and learn how to integrate and analyse it to find trends and useful information. Leaders should see this as an opportunity to utilise the right tech solutions to harness the power of data as a vital source of competitive advantage and turn a digital landfill into a goldmine of data.

 

The data treadmill

Andrew Watson

Every day data is captured by every department in every business. No matter how big or small an organisation is, it is generating invaluable insight from customer patterns to trends on the efficiency of internal processes.

But with this level of data generated, many are finding themselves on a data treadmill, constantly working to ‘catch up’. These organisations are failing to make progress as they are not utilising or optimising the data tools at their disposal. In fact, very few companies are fully embracing the spectrum of tools and methodologies available. Most businesses are spending disproportionate amounts of time on manual data processes, resulting in a ‘reporting lag’. By focusing on simply managing the mechanics of data, such as moving and storing it, businesses are struggling to unite and access real-time data insights, instead creating disjointed silos that lack the enterprise-wide connectivity and visibility needed to identify where processes can be improved.

For other businesses, the challenge comes from not knowing what they want to achieve with the data, or that they have data at their disposal at all. Unused, unanalysed data is a missed opportunity for leaders to create real business value. This is not helped by organisations rushing into buying new systems during the pandemic and subsequently leaving them gathering dust, or only being used at a fraction of their full potential. In other cases, data scientists have been brought into an organisation, but do not know where to start, as the wider business lacks a smart data strategy underpinned by clear objectives. All too often, analytics are left as an afterthought.

Businesses need to become more data savvy lest they continue to fall even further behind. Not only do leaders need to ascertain what decisions their company needs to make, and where they can get the data to support these choices, but they also need to change their data strategy by putting in place the tools and people that can integrate the data to find previously unknown information.

 

Uniting business strategy and data strategy

However, this requires the organisation to have a business strategy that aligns with its data strategy, so that the data being captured can be used to measure improvements and ultimately drive business growth – after all, more than nine in ten (91%) organisations recently surveyed by MHR acknowledged data-driven decision making as an important factor in their development.

A strong data strategy is a cultural shift that requires top-down leadership. Leaders can ensure that the purpose and use of data within an organisation is directly linked to the core business goals, while guaranteeing that a new data-optimised culture is developed end-to-end throughout the company, bridging the gap between business strategy and implementation. In turn, aligning business and data strategies enables organisations to accurately measure the success of their current approach, providing them the next steps they need to take to continuously improve.

While data scientists can be viewed as a solution, they do not have the in-depth knowledge of how the business operates to ensure true strategic alignment. Alternatively, businesses can leverage the right technology, such as an integrated software solution, to ensure that their business and data strategies are fully intertwined throughout the organisation. With this in place, complex data processes can be streamlined and simplified through automation, empowering businesses to make informed strategic decisions from reliable and accurate data.

With technology in place, business and data strategies can be brought together and can generate eye-opening insights that keep companies on top of their data, ensuring that they are not running blind in the race towards data maturity.

 

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