Slideshow 10 Initiatives to Transform Insurance IT Operations

  • April 26 2013, 11:29am EDT
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1. Democratize analytics and models

Analytics capabilities are useful across the enterprise, and attempts to provide access to varied operations is proving this. Claims processing and underwriting are becoming even more data-intensive, according to Stuckal, especially in the P&C sector as they respond to catastrophic events. Similarly, data use is maturing in contact centers, sales and marketing as well. Stuckal said data distribution platforms and third-party providers are enabling this democratization, as well as internal resources such as policy administration data collecting.

2. Integrate the customer and distributor experience

You don’t want a different distributor portal and consumer portal because then you could have two distinct views of a policy, Stuckal said; you need a linked portal using the same front-end, the same view, the same underlying data so there is an integrated system of core data. “If everyone is talking the same language, there’s going to be value there,” he added.

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3. Digitize enterprise case management

Ideally, according to Stuckal, with digitizing “you can see all of the business patterns that go into processing a claim or onboarding an agent, and if you look at that in detail enough you look at why some things work faster than others and try to adapt to that." He took time to emphasize that this was where IT has an opportunity to differentiate and become a revenue-generator.

4. Adopt distribution management for shifting channels

There are many insurance channels: general agencies, affinity groups (e.g. Costco, AAA), banks, agents/brokers, captive agents, direct sales. Stuckal reminded the audience that insurers still need to care for them, whether it be training, compliance, and particularly, making sure you’re aligning your compensation options across the channels. Insurers also need to make sure sales commissions/incentives as well as retention incentives continue to be properly established as channels shift and change.

5. Embed agile communications

80 percent of insurance service call-centers are expanding interaction choices through added channels or more options, according to TowerGroup's most recent data. This is a balancing act for insurers, who are trying to satisfy shifting customer demands while expanding resources responsibly so that they can, in the case of advanced insurers, continue branding, gaining word-of-mouth exposure and perform sentiment analysis. A good example of expanding agile communications, according to Stuckal, is SMS text messages for quick claims status updates—customers don’t want to be bothered with a call, they want the information in an immediate yet unintrusive way, he explained.

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6. Provide a mobile application portfolio

When it comes to mobile, insurers need to be careful when trying to rapidly grow their portfolios, otherwise the applications can quickly get out of control and become very difficult for CRM to control, according to Stuckal. Speaking specifically of agents, here's how their desire for certain functionality breaks down when asked what they do not currently have but want: 54 percent said e-signatures, 45 percent said online applications, 41 percent said illustrations, 40 percent said quoting tools, and 37 percent said policy status.

7. Innovate with modern core systems

According to Stuckal, this includes mobility, CAT response, self-service, new products and distributor differentiation.

8. Expand social media tools through the back office

Despite compliance issues and initial questions about value holding some insurers back, Stuckal described social media as “basically another broadcast format that IT is going to need to support down the road."

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9. Generate big data insights

For this initiative, Stuckal emphasized breadth and the fact that data insights can come from across the enterprise; "Data is just going to keep growing and growing," said Stuckal. "IT needs to be there to provide the tools, and from that can come growth through better analysis and decisions."

10. Institutionalize TaaS/Cloud Strategies

New statistics indicate that more than 70 percent of insurers IT spend for infrastructure is for in-house work, as opposed to outsourcing, according to Stuckal; similarly, 75 percent of spend on applications is in-house. However, 2013 estimates see the possibility for very small increases in outsourcing for both categories.

Stuckal acknowledged that these initiatives take some time, and provided a five strategic responses that insurers can develop in 2013 to begin tackling the many challenges these 10 initiatives present: 1.Develop an agile sourcing playbook 2.Unify sales and service channels 3.Accelerate innovation strategies: Speed to market/issue 4.Align the customer and distributor experience 5.Become a data-driven enterprise