Craig Olivier, Chief Technology Officer for Genasys Technologies, takes a look at the challenge ahead for insurers and brokers alike, as they adapt to the new normal.
For some insurance businesses, the lockdown has served a rude-awakening for the urgent need to digitise key aspects of their business.
The ability for customer to be able to obtain quotes and purchase insurance without much intervention from the insurer has become a must, as has the need for insurer teams to be able to remotely service policies as well as register and manage claims efficiently.
This gravitation in the industry towards technology-driven efficiency is nothing new, but the COVID-19 pandemic has certainly moved things along rather more swiftly than perhaps some businesses had anticipated. It has also highlighted the need for partnerships in the industry in creating a sustainable insurance ecosystem supported by core platforms that give insurers the option to provide digital capability to their end customer.
The Insurance Ecosystem
In our opinion, real value is created not by technology providers trying to build every solution for each client, but rather to provide the technical ability to connect best of breed technology within an eco-system. In doing so, this supports aspects of the insurance value chain. Many legacy platforms continue to be relatively closed and don’t facilitate innovation. The product offering to the customer needs to be reinvented and then supported by technology.
When broken down to its essentials, an ecosystem consists of a core platform, such as the Genasys SKi® platform, the backbone that facilitates API connectivity both in and out of the ecosystem.
The ecosystem exists and functions with the main aim of improving efficiencies and enhancing customer experience. Feeding into it is the Internet of Things (IoT) integration that supports parametric insurance, also known as event-based insurance, which is really insurance cover at the press of a button, when and where you need it, while telematics, Big Data, data enrichment and fraud management all serve to enrich the ecosystem.
Flexibility and agility
The ability to flex propositions has been a hot topic for some time and during lockdown it has become an even more pressing issue.
Responding to the financial strain that many customers are facing right now, many insurance companies are giving back to communities by offering payment holidays and a reduction in premiums for a certain period. This calls for flexibility in their systems to account for payment holidays, for example. Going forward, it is likely that we’ll see additional regulatory requirements on insurance businesses to mitigate this type of scenario in future, which, again, emphasises digital system capabilities that are flexible and agile.
Most of the mentioned enabling capabilities are supported by the ability to create ecosystems that can integrate new technology into legacy frameworks, typically via business to business API capabilities. Having said this, potential is moot without adoption.
For insurance technology, and so too the modernisation of the industry, to carry, this culture of adoption – and adaption – must be implemented at the top level and allowed to trickle down to the rest of the organisation. This adoption will be aided by the current environment which calls for ultimate efficiency.
Businesses need to clearly define their business objectives and leverage technology where it makes sense to do so. I have harped on about this on many occasions, but technology implemented without proper planning and vision is almost always a massive waste of resources.
Large insurers have been forced to adopt innovative approaches to improve efficiency in their operations and their offering to clients, and we have seen insurance companies acquiring insurance technology solutions to bolster their existing value propositions.
Agility today is absolutely essential. Businesses must produce innovative products in an extremely agile manner, and be able to test and fail fast. If the product doesn’t work, then the company must be agile enough to pivot as required, as we’ve seen during the pandemic.
A platform must be able to support an ecosystem that is pre-integrated and provides existing, and prospective, customers the option to select from a list of best of breed supportive technologies to assist with business objectives. An open platform that can integrate with innovative technologies is an ultimate enabler for agility, which is something every business should be aiming for immediately.