At a recent IASA meeting, I asked a colleague from a well-known P&C insurance company how his organization’s digital transformation was coming along. “What time is it?” he answered.

His question says a lot about where insurers are with their digital strategies. Carriers are under extreme pressure not just to get initiatives underway, but to transform by aligning technologies, products and processes across multiple digital channels to core systems, the front office and the distribution network. And they must do this in short order.
When the digital trend first took hold, carriers tended to evaluate their initiatives in terms of external technology, creating interfaces to mobile, tablets, and portals. But digital’s ascendance also means a change in workflow and processes. This is quite evident in personal lines claims.

Digital makes it easier for insurers to process claims quickly and accurately after disasters, like the 2014 Napa Valley earthquake
Digital makes it easier for insurers to process claims quickly and accurately after disasters, like the 2014 Napa Valley earthquake Bloomberg

For example, instead of sending the adjuster out to hand-measure physical damage, take photographs, record a history, and fill out and submit FNOL paperwork (that must be re-keyed) and added to an already-delayed claims file, a tablet with the proper software and wi-fi connection suffices.

Karen Pauli, principal with Strategy Meets Action, who has written extensively on insurance-related process re-engineering, says this example proves that it’s really all about what you can do for your customer. And the agent, adjuster and other key stakeholders are a part of that. “There are smart insurers who have figured out all the internal processes necessary to close a claim, and now thanks to digital, understand the need to put it out there. They are adding payments technologies, laser measurements, real-time photos from the customer, real-time data from adjuster in the field, EFT [electronic funds transfer] to their checking account, and even debit card use, too.”

To the insurer, the many benefits of moving to digital are notable, obviously, and the insurance community is making sure that customers understand those benefits, too. Lemonade claimed in December that its AI-powered claims bot paid a claimant in 3 seconds with zero paperwork – veritable warp speed compared to the average. And a recent Liberty Mutual Insurance TV commercial depicts a calm mother enjoying her day, explaining how taking a photo of the damage to her car facilitated her claims process, while a harried mother of three very active children listens while trying to fill out her own repair estimate at the body shop.

Personal lines insurers are also finding ways to take the data being collected and aggregating it to other lines of business, opening the door to add small commercial lines to their portfolios.

The play that digital receives in personal and commercial lines is also evident in underwriting, where full use of aggregated data and prefill automates many of the manual processes of the past.

Pauli points out that smart carriers are recognizing cross-over skill sets that underwriters possess that enable them to add value to different areas of the company, such as managing books of business or even sitting on an analytics team. “Analytics teams are not sitting just in IT anymore,” she says. “You have to have business acumen, so imagine taking all those people with amazing business knowledge and let them work with the data scientists.”

That digital disruption is upon the insurance industry is an understatement. But in the big picture, digital products and processes and channels will not supplant all physical aspects of an insurer’s operations, including those of the agent. Becoming a digital enterprise certainly means becoming and remaining flexible from the inside out. This means being open to both a change in organizational structure that will support new workflow and processes as well as talent, and advanced technologies that foster the right products at the right time, a highly personalized customer experience, and potential new distribution channels that will fuel growth.

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