Whilst the eurozone narrowly avoided a recession in the first quarter of 2023 (source), growth in the UK and most EU economies stalled, dimming prospects for an imminent end to the tumultuous market conditions that insurers have endured since the pandemic.
According to industry insiders Global Data, the top concerns for insurers today include rising interest rates, inflation, slowing business investment, and economic growth (source). These issues, combined with increasing regulatory pressures and the need to keep costs down, are forcing insurance leaders to revisit existing practices and look for ways to operate more efficiently. So, how can the industry navigate this challenging market environment whilst continuing to innovate and grow? To answer that, we need to enable insurance leaders and employees with timely insights and effective, modern tools. We start by looking into the operations, workflows, available data, and how they flow through the business.
Unifying data to improve operations
Like most industries today, insurance is experiencing a period of radical disruption, and this is fuelling a stronger focus on digitization. However, many industry players are challenged to keep pace due to an accumulation of technical debt and a lack of integration within their existing IT systems. Consequently, innovation slows down as teams are forced to work in siloed environments and rely on legacy systems, resulting in slower industry innovation.
One way to overcome this challenge is to integrate systems and processes in a data fabric. This provides a “virtual data layer” for connecting and unifying existing databases and applications. Such an approach can accelerate the underwriting process and improve the customer experience by reducing the time-to-quote through a single 360-degree view of the customer and associated risk. By connecting different claims management systems, insurers can streamline and automate the claims process to optimize claims handling, increase straight-through processing, and reduce claims leakage.
One example of this approach in action involves multinational insurer Aviva, which has over the years inherited 750 insurance companies with many systems, data, and processes. Aviva simplified its customer service operations on the Appian Platform, integrating 22 different applications on a single system for call center operations. At the same time, the Appian solution enriched customer data with real-time insights. This enabled call center agents to achieve a 360-degree view of their customers, resulting in a nine times acceleration of customer service response times.
Unlocking the Power of Data
To make the most of integrated systems, an insurer needs to make data accessible to front-line employees and business applications. It’s a priority for industry leaders. A recent study by Gartner revealed that more than half (56%) of insurance CIOs planned to dedicate their largest amount of new tech investment toward business intelligence and data analytics (source).
With data fabric in place, particularly one that utilizes low-code controls, employees can more easily discover, unify, secure, and optimize organizational data. Data fabric enables insurance providers to connect people, systems, bots, AI, and business rules with seamless process automation that eliminates repetitive work. An AI-powered process platform also provides insurers with the agility to create new products faster and more efficiently, whilst delivering superior experiences for customers and employees. In short, a modern system like this offers a new dimension of service, which will be key to managing the industry’s “perfect storm” of challenges.
Attracting talent
However, positive results aren’t all down to technology. Recruitment has long been a pain point for the insurance industry, which often struggles to attract the best talent or provide an environment that encourages them to stay. Insurers are already pressed to find good underwriters and claim handlers, and now they also find it difficult to hire tech talent to keep up with the pace of change. To drive innovation and cultivate advanced technological capabilities, companies need to attract people with the right infusion of technical expertise, soft skills, and industry knowledge.
One way to address this is with technology that automates simple, repetitive tasks, so employees can focus on more stimulating and intellectually challenging work. Insurance leaders can also invest in tools that democratize access to technical roles and help reduce the large skills gap in the sector. For instance, low-code developer tools that automate key steps of the software development process can empower employees without deep technical backgrounds to create and modify business applications. This boosts productivity and innovation across the organization.
In conclusion
During turbulent times, businesses that invest in agility and innovation will ultimately win. Whilst the insurance sector deals with outdated siloed systems, largely untapped data sources, and skill shortages, technology’s role as a growth enabler should not be underestimated. Harnessing automation’s potential to manage people, processes, and data will be the key to driving the industry forward and enabling it to thrive.
