Five steps to success in a time of rapid change
The insurance industry seems to be absorbing change after change in 2018, and the constant need for innovating is not set to go away soon. We asked Guidewire to highlight what steps every insurer should have on their priority list, and how important an IT platform can be when trying to keep up with fast paced changes. Guidewire are silver sponsors of InsurTech Rising Europe, see them at the London Tobacco Docks, September 10-12.
The insurance industry finds itself in a time of accelerating technology driven change. Intuitive digital engagements for all stakeholders in the insurance lifecycle and personalised and tailored products for personal and commercial lines insurance customers require more than just a core system transformation.
Customer expectations keep rising. Many new insurance relevant data streams and digitally native business models are emerging, sometimes from new entrants and non-insurance players. New areas of risks such as supply chain disruption and cyber terrorism represent new underwriting opportunities.
There are many other examples of change offering significant opportunities and posing threats to insurers, which poses the question of how should insurers respond? In our view, there is a set of consistent imperatives facing insurers and these imperatives include:
1 Optimise operations
There is the need to continually improve operational performance across the insurance lifecycle. Vital core functions must enable agility through standardisation and scalability, while also making incremental improvements to processes such as product definition, claims management, and customer service.
2 Increase engagement
To meet rising expectations, insurers must offer personalised products and services for customers and agents and deliver a satisfying, consumer-grade, omnichannel experience.
3 Drive smart decisions
Insurers are looking to gain actionable insights from the vast universe of available data by using more sophisticated analytical machine learning and predictive techniques. When utilising analytics in a modern core system, the natural place for business insights is not in a static report but rather embedded within the everyday workflow of the user. A Smart Core system delivers on this by
- Consolidating data from multiple sources
- Automating repetitive tasks, and;
- Using embedded advanced analytics to make recommendations or take actions.
Also, insurers should be able to leverage the combination of data from many different internal and external sources to enable real-time exploration of key business operations.
4 Innovate quickly
In response to changing competition and new entrants, insurers must have the ability to create and iterate new products quickly, enter new business opportunities and leverage the vast InsurTech innovations. This means having a configurable system and set of tools to allow you to build new products, tailor user journeys, and adapt your offerings to meet changing market demands. It also means easily leveraging an ecosystem of established value-add providers and InsurTechs that provide pre-built, ready offerings, enabling insurers to experiment by enhancing existing products and service levels, or pursue entirely new business models.
5 Simplify and de-risk IT
Insurers are seeking a reduction in the complexity of IT work that can slow insurers down, thus providing the freedom for business and IT teams to form a strategic alliance to drive performance and innovation. Simplifying IT does also underpin an insurers ability to execute on each of the previously mentioned imperatives.
A couple of years ago many insurers have started core system replacement projects to respond to the rising requirements of digitalisation. Now as we are facing this time of ever more accelerating technology driven change, this replacement alone is not enough. Insurers need to think about the utilisation of a platform that unifies three elements: software, services, and a partner ecosystem to power their business.
- Software: All software applications need to support the entire insurance lifecycle—from digitally engaging with customers to optimising core operations to enabling smart decision-making. This maps to the set of capabilities organised into three families: Core operations to provide transactional systems of record supporting the entire insurance lifecycle, data and analytics to enable insurers to manage data more effectively and gain insights leading to more accurate decisions, and digital engagement applications to provide real-time, self-service transactional insurance experiences for policyholders, agents and brokers, customer service representatives, and repair vendors regardless of the device they use . It is vitally important that these elements work together, in a unified, connected way rather than operating in siloes, in order to provide the best outcomes for an insurers customers, agents and employees.
- Services: Services include implementation, support, and operational services, including simplifying IT through cloud services to support insurers in production.
- Partner Ecosystem: A curated partner ecosystem provides access to applications and content provided by established players and insurtechs, promoting insurers’ ability to innovate quickly.
This definition of what an insurance platform should do is a big idea. Rather than how many define platform – a developer toolkit, something upon which you build apps.
Guidewire InsurancePlatform™ is the P&C industry platform that unifies these elements: software, services, and partner ecosystem to power our customers’ business. InsurancePlatform provides the standard upon which insurers can optimise their operations, increase engagement, drive smart decisions, innovate quickly, and simplify IT. We serve a global community of more than 350 insurers of all sizes and lines of business in more than 30 countries. Community feedback enables us to stay at the forefront of what is happening all over the world in P&C and to incorporate insights into the design of our platform. We invest in R&D more than any other vendor. More than 35% of our product revenue is invested in R&D. And with more than 700 people, we have the largest R&D team in the industry.
