A Vision to Make Insurance Painless with Insurtech
Buying insurance isn’t all that difficult in today’s world. There are chatbots and virtual assistants that provide you with estimates, answer your queries, and help you select the best policy for you. Claim settlements have become a lot easier with apps that help you scan and mail photographs and claim documents. You rarely miss a payment, the systems ensure, you get an alert or your bank is alerted.
Yet, most insurance customers are still not happy. Why?
Investing in Infotechs has Not Delivered It All
In the last few years, insurance companies are seeing insurtech startups as change agents to their business. They realize that technology start-ups have fluid organizational structures, fun-innovation and “google-cool” corporate culture run by teams of highly skilled people making a positive impact on any digital transformation program without having the legacy of working with the insurance industry.
The 2018 Gartner-ACORD Survey found that approximately 54% of the respondents were already investing and working with insurtechs today, and an additional 14% had plans to do so by YE18.1 Unfortunately, with these investments, most insurance companies have brought in only limited or incremental digital capabilities into their organizations. As per Gartner’s latest report titled “Predicts 2019: Insurance CIOs Must Shift Strategies from Digital Optimization to Digital Transformation to Compete”, emerging vendors, like insurtechs, typically offer a narrow range of capabilities (for example, specialized best-of-breed functionality or boutique business applications) and so struggle to reach broad adoption and remain viable.” 1
Another leading research report says that most insurtechs are investing in automation, data analytics, connected devices and machine learning to create new business models. This has helped change the way insurance companies create/underwrite policies and manage their claims. While these fundamental processes are seeing digital transformation by way of increased efficiency and better management of costs, the insurance industry is lagging behind hugely when it comes to innovation around customer experience, new services in the portfolio or speed to market.
A Vision to Reimagine the Insurance Business
Digital transformation is not about taking care of one customer touchpoint. It’s about empowering every individual/system involved in servicing a product or service with digital capabilities so that irrespective of the channel the customer chooses, the experience is the same.
Similarly, it is not about optimizing one single process. All the processes involved in a product lifecycle, right from purchase to the product maturity must be digitized to generate true value to customers. Customers who bought their insurance online effortlessly, at the click of a button, would anticipate the same ease and speed at the time of making a claim. Disappointing them during the insurance claim process defeats true digital transformation.
When collaborating with insurtechs for digital transformation, business leaders from the insurance industry need to understand what drives these technology startups and what is their mission or value proposition. They must identify insurtechs that share their vision of re-imagining the insurance business and not just bring new software capabilities. The insurtechs must understand the insurance business well enough to provide new insights, suggest new models, design new products and create appropriate customer experiences.
Here are a couple of examples from the startup world who are invested in the idea of evolving the insurance industry using technology.
Boundlss from Australia, helps predict risks and dynamically price health and life insurance premiums using real-time health and behavioral data. Their vision is to help transform insurers from payers to long term preventative health partners with their AI-powered, conversational member engagement platform.
ViewSpection, from the US, is an app and web platform that enables a policyholder to do their own property inspections within days, compared to weeks with the traditional loss control inspection model. Their vision is to facilitate a transparent and collaborative operating model between agents, underwriting, loss control and claims.
The Insurance Landscape is Changing
News reports state that insurance technology investments have totaled over $525 million in 2nd quarter of 2018. New investments in startups are increasingly either serving insurers or disrupting them. Even non insurance players, like Amazon are showing an interest in insurance.
Incumbent insurers today have no choice but to continue creating successfully collaborations with insurtechs or to create an ecosystem by themselves similar to a technology startup consisting of:
- Innovation and co-working communities
- Technology accelerators
- Insurance carriers and distributors
- Research, training and education
- Global reach
- Governmental leadership
- Networks and connections
- Talented and highly skilled workforce
With a view to creating these critical ingredients for a successful insurtech eco system that will help advance the digital transformation goals of the insurance industry, we created the Infosys Technology & Innovation Hub in Hartford, CT. Hartford is the epicenter of several global insurance companies.
The Infosys Hub includes insurance, healthcare and manufacturing labs that focus on smart underwriting, claims fraud, IoT and Cloud among other things. It will employ cutting-edge data security and data-sharing features to help insurance companies comply with all applicable privacy laws while promoting innovation. We are finding new use cases for Artificial Intelligence, robotics, Internet of Things and Blockchain in the Insurance business. Infosys will also leverage the Hub to train its employees and develop pioneering techniques with agile, development operations, cloud and information security projects.
1 Predicts 2019: Insurance CIOs Must Shift Strategies From Digital Optimization to Digital Transformation to Compete
Title of the report: Gartner, Predicts 2019: Insurance CIOs Must Shift Strategies From Digital Optimization to Digital Transformation to Compete
Analyst: Gartner, Kimberly Harris-Ferrante et al
Date of publication: 15 November, 2018