Insurers see automation as a crucial component of the digitally transformed customer experience: The more processes that can be handled without human intervention, the better. But carriers still must be selective about where to deploy automation, as well as how to continuously improve it with the advent of artificial intelligence and machine learning capabilities, in a way that preserves policyholders' trust and confidence. Join editor in chief Nathan Golia and Arizent VP of research Janet King as they explore the major issues in the race to automate.
Transcription:
Nathan Golia: (
Hi everyone. And welcome in to digital insurance's first transformation forum. I'm Nathan Golia I'm editor in chief of Digital Insurance. And this is a pretty, uh, exciting moment for, for us. So, um, these transformation forums are a new thing we're gonna be doing as part of our enhanced membership offering, which you probably heard quite a bit about. Maybe you had seen a video of me talking about it a little bit in your email, and we're so glad that so many of you had come to join us today for the first one. The goal here is to take these sort of conversational and thought leadership, uh, paradigm that we have with DIGIN and Women Insurance Leadership and all the events where I've met so many of you and talked to you about insurance, digital transformation and ensure tech over the past several years and bringing that to the rest of the year.
Nathan Golia: (
Um, some of these, uh, transformation forms are gonna be like this one today. I've got Janet King who's VP of research for Arizent, our parent company, and Janet and I have worked together so much on proprietary research that we, that we think will help, uh, you know, provide you with new information that you can really use and operationalize, um, is as you're navigating the digital transformation of the insurance industry, which we cover on dig in.com. So today we're gonna be presenting, uh, a, some, a survey we did on automation. Uh, next week at dig in, Janet will be presenting our insurance specific transformation, digital I'm sorry, digital transformation survey on the state of insurance, digital transformation. And then she, and I will be back, uh, just like this, uh, later on in June talking about talent. Um, but some of the other transformation forms will be more, will be more round tables with, uh, insurance executives, as we, as we cover some of the topics that, uh, dig in.com will be covering this year, uh, including things like the state of insurance, telematics, uh, ethics in AR artificial intelligence, deployments, and insurance and sustainability.
Nathan Golia: (
So we've got a lot of these really fun transformation forms, uh, lined up. I hope you'll you'll join, uh, dig in, uh, dot com, join digital insurance as a member, so you can see all of them. Um, and without saying too much more about it, I'm gonna turn it over to Janet. Talk a little bit about the survey that we'll be talking about today. So Janet's gonna be sort of doing the play by play. She did the research, she parsed the data and I will be, uh, doing some color commentary throughout the rest, but, uh, she, we're gonna start here with just her talking about the survey.
Janet King: (
Excellent. Thanks. Thanks Nate. Um, so as you mentioned, we do a lot of research with digital insurance and some of the surveys are conducted among multiple sectors of the financial services industry. So they may include banking and wealth management along with insurance and other sectors. And some are for insurance specifically. Um, the research that we're gonna be talking about today was conducted among both banks and insurers. Um, so we're gonna focus only on the insurance, uh, results today, but if you're interested in seeing how insurance benchmarks against banking, you can see the full research report on dig in.com. So feel free to take a look for that as a follow up to our conversation today. Um, so again, this research was conducted. The slice that we're looking at today is a slice of the research among insurance carriers and brokers. And we really wanted to explore how they're utilizing and optimizing internal resources, you know, their people, their processes, their technology that are really the backbone of their organizations, and also how they're utilizing external partners and vendors to drive automation within the workplace.
Janet King: (
So kind of that 360 degree view on automation, um, all of the industry stakeholders that responded are directly involved with, or have knowledge of their organizations, enterprise automation, initiatives, um, six outta 10, as you can see here, hold director and higher titles. So these were senior lover, senior, senior level folks primarily, um, and we recruited respondents from a mix of company sizes and we ended up with more than half around 55% at companies with a thousand or more employees. Um, and the majority of that group actually came from insurers with 5,000 plus employees. Um, just for context carriers represent three outta four respondents. So overall I think we had a really nice balanced respondent pool that can help us to understand some of the key trends that are shaping automation initiatives in the industry.
Janet King: (
And just one more thing to make sure everyone's on the same page, we did provide the survey respondents with a definition of enterprise automation so that everybody was kind of thinking about it from the same lens and, and we could analyze the data, uh, knowing that everybody was starting from the same place. And so we defined it as you see here, and I'll just read this quickly, but we look at it as the application of technologies, including AI and robotic process automation to empower end to end business process automation. So the thinking is it goes beyond single point to point integrations and rather refers to an organization's ability to automate and flow operational and post operational data between multiple applications and systems to automate complete business processes. And those technologies can be on premise or they can be in the cloud or hybrid, um, and cover application integrations as well as data integrations.
Nathan Golia: (
Yeah. And I think that one thing that to, to keep in mind here is how important it is to, you know, have this, this clear definition of what automation uh, is and how and how it's applied. Um, it's one of the first things we always ask when someone, um, pitches us that they've got, they've got a new AI solution. Well, well, what makes it AI? What is, what is the technology, why is it artificially intelligent or is it more of an RPA thing or even just rules based stuff? Um, you know, seeing this evolve over the past 10 years from, from the just sort of rudimentary rules based items to what is, what is possible now with AI and machine learning, um, I think really shows through with some of the results and that we're seeing, you know, some of, some of the, when, what we're seeing insurers work on. Um, but like, yeah, just seeing that, that these, uh, technologies are, um, being taken seriously, uh, being well defined and people are understanding the, the breadth of possibility here.
Janet King: (
Absolutely completely agree. So we started this out, you know, Nate by really asking insurers to tell us what they see as some of the top opportunities for automation and insurance. We wanted to kind of get that industry sentiment, um, around that the group think, and as you can see here, they see lots of different opportunities for automation. Um, kind of floating to the top of the list is customer service and support and claims processing and settlement. Um, so that's, they both earn slightly more mentions than some of the others, but you also see fraud prevention, um, bubbling to the top, uh, regulatory and compliance use cases, personalization and underwriting. Those are all seen as opportunities for at least one outta three stakeholders that we we surveyed. So how do you think that sentiment aligns Nate with what you're seeing in practice in the industry and like looming on the horizon? Like,
Nathan Golia: (
Well, one of the interesting things about insurance from a customer service and supports, uh, lens is that, um, insurance is, is generally pretty complex. And therefore a lot of the, the support questions, or I should say support questions and service questions tend to be slightly more complex, but there's a, there's sort of a, there's sort of a parabola here, right, where there's not a lot in the middle that are sort of medium comp complexity there's stuff on one. That's pretty easy. I need to update my address. I need to, uh, just get a copy of my policy. Um, things like that that have been bottlenecked by be being shunted into a, uh, into a side where it's like, I have very, I have very serious questions about my specific claim or my coverages that I need a, a person to answer. And what insurers are try to do is really get the top of the funnel with automation.
Nathan Golia: (
I've talked to about, sorry, when I've talked to insurers over the years, I trying to get that top of that funnel and be able to automate those really simple asks that, um, can be bottlenecked if you're, if you're only going through a person that's also answering more complex questions and you're, and they're not able to, um, you know, they're not, um, you know, getting to these simple questions that causes frustration. People just wanna see my, my address is updated. My phone number's updated. Uh, my, my, I uploaded this document and it's confirmed that. It's okay. Um, all those things go, I think, to these sort of existing customer service and support automation, it's all about understanding that funnel of, um, of requests and getting them to the right spot claims processing. Oh, I'm sorry. Just wanted to say that claims processing is a, is another area where the goal of the automation is to give feedback.
Nathan Golia: (
Um, insurance companies say that when people file claims online or even on the phone, or I'm not, I dunno, I shouldn't say on the phone, well, they file claims online, but on the mobile phone, um, that, that next thing they do is they always call the call center, always hitting the call center right afterwards to make sure it's there. And an effective automation program will provide a sense of completion and a sense that the, uh, that the claim is in process and gives people that immediate peace of mind, they don't feel they have to call and check in and make sure they did it. Okay. And some of these automation, uh, initiatives, it really does come down to the experience around the automation. It may be just fine. You, it may, you may have gotten stuff, but are you, are you kicking it back to the customer?
Nathan Golia: (
Is the automation, is the automating, uh, giving the response that is, that is meaning that, that need of the customer to understand that their, um, that their claim is in process. It is being taken seriously. It is, it is going to work out. Everything's gonna work out in this moment of truth for them. Um, I just wanted again, to keep going, coupled down the line, just to talk about what we're hearing about in terms of how automation is, is being applied, fraud detection, um, prevention and management. The, the important thing here in automation is just to, uh, streamline the process of, um, everything else related to insurance, whether it's selling or doing a claim or whatever it is, um, automating that instead of having to have a person go over everything with a magnifying glass, um, to just make sure is going to be, uh, important as people expect that that immediate return of from their insurance company, that, that, yes, this is, uh, this is happening.
Nathan Golia: (
This is being taken care of if you've got a claim and, you know, if you're waiting for it to be reviewed, to make sure it's, it's not, it's a, it's a real claim and not some sort of fraudulent claim and you're, but, but you're on the other hand saying, why is this being reviewed? It's just something isn't working correctly. Or it's, FLAS something, um, that's the bad experience and it'll, it'll negatively impact the relationship with the insurance companies. So what insurance are trying to do is really get those granular solutions in place that can effectively, uh, only, uh, detect the, the, the, the most problematic, uh, things like claims or bizarre, uh, entries on applications or things like that. But anything else you wanted to talk about this slide, Janet?
Janet King: (
Yeah, but I think one of the common threads, and we're gonna talk about this a lot later, but one of the things I'm hearing you talk about a lot too, is that need to make sure that it's more of an end to end process, right? So like, yes, I've automated the process of people inputting their claims, but if there's no feedback loop for the customer, they're still gonna call the call center. Right? Exactly. So it's like making sure that the automation is providing, um, that it's supporting the entire customer journey, I guess, if you will. And some of those more customer facing, um, applications and in some of the back office stuff, it just needs to be connected across all the different cross-functional areas that are impacted when you're, you know, um, trying to make sure that you are meeting all regulatory and compliance requirements or something like that. So we see that come up a lot later in a few, in a few future slides, that kind of theme,
Nathan Golia: (
For sure.
Janet King: (
So we wanted to dig into that opportunity idea a little bit deeper, and we wanted to find out what are the areas of automation that are of most interest to ensures. So like, what do they see as kind of the hot new areas, um, and what we saw here. And I think this kind of relates to what you were just talking about too. Nate was intelligent document processing came up at the top of the list, almost six outta 10, um, named that as one of their top three, then artificial intelligence and machine learning, and then process mining. Um, but we also had feedback from the insurers that we spoke to that, you know, none of these things are, um, necessarily without challenge, right? And with AI, which you often hear is that they just are facing in this quote, we're facing so much data to clean in scrub in order to be able to take advantage of the cloud and AI computing. So that idea of having, um, enough data, enough clean data, that's not siloed, um, comes up a lot when people are looking at sort of opportunities to automate,
Nathan Golia: (
Right. And I think that you look at that 59% intelligent document processing. And that really is the first thing that has to be done for insurance companies. Um, they have to, first of all, they're gonna have legacy, uh, app, uh, papers, you know, paper, and even sort of like, I don't, this is kind of, this is a, a term I'm making up. So if it, if it has another application, I'm sorry, but it's talking about like dumb documents, things like spreadsheets, or a lot of things were being input into sort of, you know, early, you know, not early, but like, you know, sort of standard computing forms that are not really that have to be then parsed. Uh, like I wish I think this quote is talking about here. Like you gotta, you know, Excel sheets, they have been, uh, the category, the categories have changed over the years.
Nathan Golia: (
Some of them are old. Some of them have been done by people who have left. Some of the things were as, as assumptions that such was gonna be needed and such wasn't, and that's all gonna be processed in order to feed everything down the line from intelligent document processing, but documents in insurance, aren't just the applications and spreadsheets and stuff. We're also talking about things like when we talked about claims the documents of, of images, right. Um, that there's, there's a lot of image data in insurance companies. There's a lot of image data that insurance companies are trying to use in that customer journey in that feedback loop. Like we were talking about last time and being able to understand like what a picture of a car says is, uh, is really important documents, uh, you know, things like, um, a document, uh, sorry, computer vision for documents, you know, you know, that kicked off, you know, a decade ago, uh, or even slightly more maybe at this point with banks, with checks, but that still is just written. It's not a picture of offender with the light shining on it at a different angle and the camera quality being impacted and, and or the situation of being able to, uh, get a picture of a roof, um, or, or a basement, a crawlspace or something like that. All these documents are also being processed, uh, and having to be brought into, uh, the insurance, uh, insurance processes, um, down the line. And I
Janet King: (
Think I, yeah, yeah. Is that sorry, say they have to be stored in everything a little bit, like in the healthcare system. Right. Right. I mean, like it's a similar problem that they've had in healthcare for years.
Nathan Golia: (
Right. And the, the goal is that eventually the, uh, this AI and ML will do all that document processing, but right now, um, you know, as there the, we are those, those, uh, those applications aren't being instructed by insurers as to their needs really. And, uh, that's where a lot where a lot of it's, uh, that's where all the cleaning and scrubbing is, is going on in order to take advantage of what all this other stuff down the line.
Janet King: (
Yeah. And cloud will certainly have an important role there. Right. Because it will allow them to kind of scale up, um, for like storage and management of all those images, um, as time goes on. Um, so I, I think we've sort of talked about the very many different kinds of opportunities that there are to automate, um, across the industry. And, um, it's kind of like what's driving that for most of these insurers and the potential to lower cost, including personnel cost, um, emerges as one of the most widely embraced benefits by almost half of those that we surveyed. And in fact, in a follow on question nine out of 10 said that they expect automation to moderately or significantly reduce operational costs. So they see it as a huge benefit and they see the impact from automation and that front as being pretty significant. I think other broadly accepted benefits from automation included better customer experience, improved workforce optimization and employee efficiencies and in improved competitive position. Um, we also saw that one out of four, see automation is delivering revenue growth and accelerating innovation. And so while those two things were last on the list, that's still a pretty significant finding, right. That one out four would see it as really accelerating their, their innovation cycle. Um, so there certainly seems to be a number of benefits here for, for, uh, insurers who get things right, Nate, but what stands out for you on this list?
Nathan Golia: (
Well, I think when we start with talking about cost reduction, including personnel, I think that we have to have a little bit of a caution flag there. Um, I think what we're gonna see instead, automation is going to is going to change the texture of the insurance enterprise in terms of what the jobs are that are needed. If you're not having to have people pour over documents, you can still have someone employed, but maybe they're doing something else that, uh, impacts something farther online, for example, revenue growth. Um, and if, if you've got, if you, if you're not, if you've got more people working on product development, having more, and you've got the sort of framework of automation where you can get customers onboarded, and you could process their claims in a satisfactory way, and they're not jumping ship because the, that that experience is, uh, is poor.
Nathan Golia: (
That's how you get revenue growth at the same time that you have cost reduction in certain departments, you're gonna be moving people around to develop things, and there's no shortage of items that can be insured out there. And there's no shortage of new risk, new risk vectors that can be, uh, insured as long as the insurance companies are able to provide products there. And I think that, that when you look at those, those, the, the end of that tail on revenue, growth, innovation, and product development, the insurers that are thinking about that are thinking about if I have this framework for onboarding and claims processing, that's really fast, really simple that leverages the breadth of digital possibilities. Um, I'm gonna be ensuring more stuff. And, uh, that just means a bigger customer. Um, I think that the best, the best things to say are, are somewhere in the middle here, though.
Nathan Golia: (
The, the, the sort of more, uh, tangible in that we will ex we will see what they expect from workforce optimization and, and competitive position. I mean, you just, the competitive position comes from the customer experience, but the workforce optimization not having your employees get bogged down, uh, trying to break through silos. But like we talked about a couple slides ago, getting the, the back ends linked up, uh, and not having people have to, um, you know, wait on their coworkers who are bogged down, other things, uh, that is, that is really gonna improve your competitive position by improving your customer experience.
Janet King: (
Absolutely. And I, I think another huge benefit, and this one's really interesting, at least this is a benefit that ensures believe they will get is that they, they think that, um, through automation they'll be able to more effectively compete with inure tech and other new market entrances. So we had nine out of 10 respondents who believe automation will have a significant to moderate impact on their ability to remain competitive. So that to me, Nate feels like a very significant number. It essentially tells me that nearly all insurers understand that automation can help raise their game and better position them against industry disruptors. Can you point to any examples where you've been seeing insurers, you know, really strengthening their market position as a result of automating some aspect of their business?
Nathan Golia: (
Um, kind of, let's see, let me think of a, of a good one here. I, I think that the best example, I don't, I don't like to use U S USA as an example, but it's the one that's coming to mind the most. Uh, they've had a very robust, uh, claims transformation, um, where they've been able to, you know, really sort of set up, uh, I should say the reason I don't like to use those say is because they don't have a direct competitor because of their very specific audience, which, uh, um, does, which does help them. And in some ways actually innovate a little faster because their audience is, is very enthusiastic and not, and unlikely to jump from them. If something they they're they're, they're, they're willing to take risks in that way. Um, and not that I don't think they it's, it's a good company.
Nathan Golia: (
That's what I meant was, um, you know, they're, they're using the, they're using the Goodwill, they've built up with their audience to try new things. And, uh, we've seen them, um, you know, build up a claims experience that has helped them, you know, like I said, like really like deliver on that promise of being able to use digital, uh, to, um, to, uh, to sort of, uh, revolutionize the relationship between the insurer, the insurance customer and the, um, and the insurance company. And we've seen other insurance companies do it. Like I would even, you know, talk about any of the usage based insurance, um, any of the usage based insurance programs that are out there from, you know, most major companies having 'em at this point. Um, you know, what we're seeing there is that they're providing that instant feedback. They're giving you some they're, they're showing you tangible results from your input as a customer.
Nathan Golia: (
Uh, and that, that, that does help. Um, I do. I think, I think the thing that talk about here, uh, about the nine outta 10, uh, especially, uh, is the question of like, are, have insurers realized what their value is now insurers have over the past, you know, decade or more learned that while it it's, it's that balance between insurances, complexity, driving people to wanna have that sort of one to one personalized relationship with knowing that everyone's busy and everyone's overwhelmed with, uh, things to do. And therefore they, it's not always gonna be comforting to be like, Hey, we're just your down home insurance company, you know, and we're, we're taking things slow. It's like, I'm sorry, I can't take things slow in my life. What the, what your down home insurance company can do is bring their experience in understanding risk management, um, and apply the automation to that.
Nathan Golia: (
And that helps them, um, compete against ensure tax that are starting from the, uh, we are not your down home insurance company positioning where we are, we're starting from the automated, automated, uh, enterprise mission, but we don't have the insurance, but they, they're not saying this, but like the insurance companies can say, well, you're, you know, these, these insurgents or, uh, surgeons, uh, when you have the worldly Sur check, I always, I always go to insurgent. So fast disruptors is probably a better one. Um, you know, we can say like, well, we have the technology and we have the, the, uh, years of expertise in managing families risks, just like yours or businesses, risks just like yours. Uh, and that's where I think we're seeing this answer here. Like as long as we get the technology, right, we've got the expertise is how I think it sures feel.
Janet King: (
Right. Right. And we, you know, you mentioned the digital, the state of insurance, digital transformation research we did. And, um, what I'm seeing come up over and over again. And a lot of the research we do is that automation is such a key piece of the digital transformation equation, which I think is also like feeding into this overwhelming nine out of 10, think it will help them remain competitive. Right. It's just a fundamental piece of what you need to have in place to actually be able to push through innovation and transformation. So it's just a really critical ingredient, I guess. Yep. Is what I'm trying to say there. Um, so let's pivot for a minute and just take a look at where insurers are on the automation journey. And the survey data suggests that most have adopted automation technologies, including AI enabled and RPA technologies, at least to a minimal or moderate extent while only about one in 10 have implemented those technologies to a significant extent.
Janet King: (
Um, so again, in that research that we are gonna release next week at dig in, um, we found that most insurers are taking an incremental approach to digital transformation and the interest of not changing too fast. And as I just pointed out, automation is certainly a key piece of that digital transformation roadmap for most firms. So how do you see that reality and like this data regarding the adoption of automation technology aligning that reality, that we may be going at an incremental pace for digital transformation, and, you know, only about one in 10 have, have really rolled out these technologies to what they would consider a significant extent.
Nathan Golia: (
Well, I think you have to look at how the insurance industry, um, in the, you know, up to the, where we would consider sort of the insurer tech era, maybe starting between, uh, let's say, let's say between seven and 12 years ago, I used to say five and 10, and I realized, spent a couple years since I started using that, that number , um, leading up to that, you know, that's when you started seeing a lot of the commod commodification of, uh, insurance, uh, of, of some of the major lines of insurance, like especially auto, um, driven by the, you know, the first wave of computing revolution, um, where, you know, we could do some pretty easy, uh, some of, some of the more turnkey, um, some of the more turnkey products were able to, uh, be commod commoditized quite to a, to a high extent.
Nathan Golia: (
That meant that insurers were in a, there was a lot of customer churn and insurance, um, because of that, um, you know, and that that's reflected the advertising, uh, for insurance companies. And like, uh, like I talked about with U S a a it's sort of the opposite for most other insurance companies where they don't want to rock the boat because it is very, because they know that customers can jump to another company pretty easily, if they're your auto, uh, if they're, they know if they have an auto policy with you, for example, it's pretty easy to change companies where it used to be not as easy, um, that sort of maybe the early automation. Right. Um, and so what I think drives the incrementalism is just not really not really wanting to rock the boat, um, too quickly, even though, uh, if you really put the pedal to the metal at an insurance company with the, uh, talent and capital resources that most major insurance companies have, you could, we could rebuild those things if that was your priority, but their priority is still also customer retention. Um, customers are idiosyncratic. Insurance is complex and people don't wanna see a bunch of changes being rolled out by their insurance company over and over necessarily might be the conventional wisdom. I, I, you know, I don't know how, how much the consumer research really bears that out, but I think that is why we see, um, the sort of more incremental approach is not wanting to throw too much at customers all the time, knowing how easily they could switch if they get, uh, frustrated.
Janet King: (
Yeah. And that makes total sense on the digital transformation side. I guess another thing I'm curious to get your opinion on though, is, is the fact that is the pace of automation contributing to that incrementalism as well. Like, are we, is a bit of a chicken and the egg thing, right. I mean,
Nathan Golia: (
Well, one of the things that happens ironically, is that when you start out saying, I'm gonna take an incremental approach, because I think it's gonna take X amount of time and money that it always gets cheaper and faster to do it. And that's why you see insured tech where like, we can just start this right now. We can just, we can just, you can just plug it in, you know, mm-hmm, the, technology's here, it's tested in these other use cases, whether it's banking or retail or whatever. Um, we've got all these, we've got all these things tested. Um, but eventually it's gonna the insurance companies and tell, well, geez, I was, I had this as a three year plan two years ago, but now I can just do it in the next two months because the technology is that much more developed. And I think that, um, that, that just becomes that a question of, of will within, within the insurance company.
Janet King: (
Yeah. To be able
Nathan Golia: (
To jump as,
Janet King: (
Yeah. Yeah.
Nathan Golia: (
And I think the pandemic changed that, that the pandemic is the catalyzing event that said like, well, we should just do this now. Cause now we have to, that's the external event that drove as an external event that, that drove a desire for more automation.
Janet King: (
Absolutely. I mean, it's, it's definitely a changing, like a frequently changing landscape. Right. Um, and so I think, you know, another point that I think is pretty interesting is that the, the data that we collected shows that industry stakeholders see a lot of benefit from automation. They see a lot of opportunity. And as that last slide showed, they're at least beginning to adopt, if not fully deploy automation technologies on a wide scale. Yet we asked them to rate their performance to date on their automation initiatives, most graded themselves as fair to good. And we only had one in 10 who reported their performance around automation as excellent. So does that surprise you to only
Nathan Golia: (
No. Cause that's, that's sort of like everyone just kind of sees themselves a little above average. Right. , you know, uh, we interested to see if we had stuck average in between good and fair. What the, whether, whether that would've changed, how many people say excellent or good. Um, I, I think that, you know, people wanna stay humble about their accomplishments. I think that, you know, uh, there's also the idea that's like, well, you know, it's, it's still early. Uh, the people writing themselves excellent. Might have a little bit more experience. They might have been the early adopters, uh, or they just might be true believers that, that in the, in the technology, in a way that not, you know, everyone might still a little bit of skepticism, um, about whether or not the, the automation promise is delivering to the customer. Um, but, uh, no, I don't think there's, I think this, this looks about right. Everyone kind of thinks they're doing, they're doing okay.
Janet King: (
No, one's giving themselves an a plus maybe, but they're doing okay. yeah. Um, so what do we think might be getting in the way of better performance around automation? So we dug into that a little bit and there's some, some interesting data. Um, we identified a number of key obstacles, including legacy systems, um, implementation cost and talent. And as you can see here, we had one respondent who said the biggest obstacle to a more fully automated enterprise is the legacy systems that would have to be rewritten or otherwise impacted. So Nate legacy systems are a common concern for modernization and automation efforts in all verticals. Right. We see this come up as an obstacle over and over again. So it's not just an insurance issue. What I kind of wanna ask you to talk about though, is scarcity of talent. Mm-hmm, because that's also a frequent concern, but one that's really grown over the last 18 months or so. And I know we'll be back together later in the month, talk about the war for talent, but you know, what are you hearing at least at a high level about the talent challenge in the industry and what kind of impact do you think that might be having on efforts to automate specifically?
Nathan Golia: (
Well that's, this is a situation where the conventional wisdom for why the insurance industry had trouble, uh, attracting talent might be changing. Um, insurance companies, uh, are located in a lot of different places and they're not all New York, um, in the same way that banking is, uh, very clustered around New York or, or, or major cities. And, uh, you know, I've talked there, there are a number of, of very good insurance companies, um, that are not, that are in those sort of, uh, second what they may consider second tier citizen location. I don't think that I'm from Rochester, New York, you know, I'm from a mid-size city and it's, and I would be happy to be back there. Um, so I've never, but that was the conventional wizard for a while. We can't get people to move to this place when they can just move to this place, which is a little bit more exciting and has more to offer, um, when they're, you know, coming out of college and they're highly desired.
Nathan Golia: (
And that was New York, San Francisco, for example, uh, now, now with the, uh, advent of advanced remote work, which is of course, an automation, an auto, an automation implementation all its own, um, that now we're now it's, it's, it's, it's sort of like everyone can work anywhere. So how do we stand out as a company more? Right. And, uh, so it's like, it comes from like, well, we can do what we want as a company. We can have the best time off policy. We can have the coolest benefits. We can have the like nicest gym on site, but people still don't wanna live here to now. Everyone's just at their house. Anyway. Now we have to find other, other ways to attract people when they can just sit. If you could sit in your, uh, living room and work for an insurance company, or you could work for a big tech company, or you could work for a big retailer, what, what does make the difference?
Nathan Golia: (
That's why I think we see a little bit more of the insurance industry recently talking about, um, mission, um, as a, uh, as a, as a, uh, as a way to stand out saying like, Hey, you wanna help? You wanna help people in the business world? This is how you do it. You know? Um, you, you're showing up to people and giving them money to rebuild their house, fix their car. I mean, that's what, you know, that feels good. And I think that's what people are trying to do. Um, but I, I think the insurance industry, everyone's, everyone's, everyone's struggling for talent because of that, that sort of flattening of the work of the workplace. Um, and you know, it's just a matter of finding a narrative. I, I did have a couple, I, I have to talk about a couple of other ones though, which I thought were really interesting.
Speaker 3: (
Sure. Go ahead.
Nathan Golia: (
one was the, when I talked about cost of implementing is too high. Um, I mean, legacy systems sort of speaks for themselves, but talking about it for a decade and, you know, people have people have switched and implemented modernized legacy systems that now aren't themselves outdated. It's never gonna, they're never gonna be perfect because of the, uh, the, the rapid pace of technology, which I think gets number this the second little bit about cost of implementation. Like, yeah, like the first time you hear about something, you've never thought about that cost ever, right? This is a new thing that you have to do. Therefore it's gonna sound, um, therefore it's gonna sound more expensive than the previous baseline, which was zero, because you've never thought about it before. But I think that that, that wears off as you see it implemented other places. And as the technology gets cheaper, I just wanna talk about automation.
Nathan Golia: (
Technology, not flexible enough requires too much human intervention. This gets back to what we were talking about at the beginning, when people are trying to sell you automation or artificial intelligence machine learning, ask them what makes it that. And I think that is, that is the question that, that, that savvy insurers are asking. And some of them are saying like, Hey, I'm gonna hold out for the next iteration of this thing, because I don't need this one right now. Like, this is not doing enough for me. I'm trying to, I'm trying to, to remove, remove, remove, ah, remove human intervention. I, I don't wanna be checking in every, every part of every step of the way here. So,
Janet King: (
So ask those hard questions and really understand that's those, what's the benefit.
Nathan Golia: (
Well, I think, I think it sures are, are asking the hard questions. That's why you see that answer there at a quarter of respondents, right? Mm-hmm yeah. Some of this stuff, we just look at it, we think it's vaporware, which is a fair thing to say. Some of it is transf transformative as some of it isn't and you don't wanna be home the back.
Janet King: (
Right. Okay, great. Thank you. So we, we started the, the, our discussion today, really talking about how one of our objectives at least was to better understand how insurers are utilizing people, processes, and tech to advance enterprise automation. And so let's just focus for a moment on the intersection of process and tech. Um, because one thing that became very clear from this survey is that the path to automation success is blocked at least in part by reliance on single point solutions that are automating just a part of a business process, rather than supporting truly end to end business process automation. I mean, you, you touched on that a little bit in the whole comment about, um, customer service at the start of this. So what, what are your thoughts on that, Nate?
Nathan Golia: (
Um, I think that what's, what's happening here is that it's sort of right. Less and wrong time sometimes for insurance companies. When you see that they're automating part of a business process, that's part of that Silicon valley piloting small pilots, um, we're gonna do what we can, let's see what it looks like. And then suddenly you've got one department that's like operating on a new wavelength compared to everyone else, and then it's, and then it's bringing that to the organization. I think that's, um, that's, it's a good lesson to learn for insurance companies that you need to be able to do, to do at, to do pilots and, and, and deploy things in an agile manner. Um, but yes, it is that insurance is still a complex ecosystem of different, um, business areas and different concerns for the customer. And therefore you need to be thinking about things end to end, even when you're starting pilots. What, for example, when you, when this department's piloting something, the next, the question has to be, how is it going to apply to everyone else if this is successful? And if it's not successful, you just throw out that paragraph. But like, you should probably at the outset say like, how do we translate this across the industry, across our enterprise? Sorry, I'm trying that we get five minutes here.
Janet King: (
So I know it's good advice. We only have two more slides. So let's just talk about tech quickly because tech of course is the cornerstone of automation and the industry. Um, and we saw that three outta four of the insurers that we talked to said, they're gonna be adopting new automation technologies in the next 12 months. Um, but they have a number of concerns about implementing those technologies. And at the top of the list, it was data security and privacy concerns. They have competing it and business priorities. So other things competing for their attention. And then, um, they're in the process of migrating systems and data to the cloud. So I, you know, what are your thoughts here? Any sense of like what other priorities might be taken precedence? Yeah, go
Nathan Golia: (
Ahead. I gotta say you see, you see 38% data security, 35 it department focus on other matters that a huge drop off to that quarter level mm-hmm, that's because the other matters are data security and what are you gonna do, man? You gotta take care of that. You have to sew that up. Uh, and it is, um, an unfortunate reality that, um, that there are people who are trying to get into everyone's systems and the it department is fending them off at a, I, I, I have some friends who work in, in it security and, you know, it's one of those things where it's just like, when you hear them talk about it, you're like, oh my God, I can't believe this is happening. Like it is. And how many vulnerabilities there are. So I think, I think those two are linked and I think, you know, the rest comes down to like, um, how much you're able your ID, department's able to, uh, yeah. To sort of move on to other things of things.
Janet King: (
Okay. Last point. Um, I just wanna kind of close out our discussion with a bit of a crystal ball prediction, which is around the people, part of the automation process. Um, so the majority of our respondents to this survey expect automation to reduce their overall head count. Um, they also expected to have a significant moderate impact on the composition of their workforce. And I think you talked about that previously, like right, changing the nature and types of jobs available. Um, yet most of them actually lack a plan to support that change. So we only saw two outta 10 respondents who said they feel very well prepared to govern, um, a, their expected workforce transformation. So what do you think that they should be thinking about today to ensure that they're prepared to support their workforce in the future?
Nathan Golia: (
Well, I think that, uh, there has to be, um, an understanding of there has to be a plan for bringing people together, which is, which is still, which is still desired in certain ways, but not with, not in the office all the time, because that is almost, it is very difficult for people. I mean, you're, you, can't relocating is extremely difficult right now, um, with the cost of, of housing and fuel. Um, and people want jobs, people do wanna work, um, and companies are gonna have to figure out a way to, uh, leverage the, you know, possibility of, of remote work while also I do think they, that, you know, it's important to get together, uh, in the office or, or to have some sort of centralized locations. Some people are gonna have to be there, but just figuring out like really going through and saying like, what can we do?
Nathan Golia: (
Where can we put this position? Um, and how can we show that to our potential workforce in a way that is, that is credible and shows that we're, that we're, we're, we're working with understanding here. I think that's, I think you really, you really just want to have a plan, uh, look like you have a plan. Um, cuz a lot of companies, I don't think they do look like they have a plan. Uh, and that's not, that's not about insurance company. I'm just talking about companies in general, every day, you're reading the news about, you know, someone wants to come on back to work full-time with other people don't, they're losing people, whatever. Um, it's happening today with Tesla, um, who just built a gigantic factory about half an hour from my house. Um, so I mean, I, I think that there's, it, it it's, it's really just about like UN you have to please understand the workforce, please listen to what people have to say about why they want to work at home and what their, their pain points are with their families with themselves and then UN and then have a plan that, that takes that into account.
Nathan Golia: (
I think that's the best way to do it.
Janet King: (
Great. Thank you. Um, thanks Nate.
Nathan Golia: (
Yeah. Um, let me see if I can get a couple of these questions in. I wanted to start with, uh, Ramona who said it's very odd to be the characters that carriers don't try to adapt to more innovators and work with creator communities versus trying to figure it out, out themselves and stay antiquated. I think that, uh, some carriers are more insular than others. We do see a lot of carriers who have innovation labs, we're going out, bringing comp, bringing up, bringing people in. Um, I, I, I think that more, I think that more carriers wanna do that. I think that COVID really put a, like I said, having those face to face opportunities, how people come in and see the company has sort of changed a little bit. Um, but I'm hopeful that that carriers will come back to that. But I bet in the past couple years it has seemed like carriers are trying to be more insular. Um, mostly because of that fact with COVID. Um,
Janet King: (
Have you Nate, I would just add to that, that we just finished a big insurance innovation survey. It was actually a broader financial services survey, but one thing we found in that among the insurers is that there has been, um, a definite uptick in the percent that are starting to look to partners and um, outside, uh, resources to really drive innovation. So we're, we're seeing that start to happen more and more. So the rise in the innovation lab, as well as a reliance on knowing that you can't build everything internally, you do have to partner,
Nathan Golia: (
Right? You need new ideas, you need fresh ideas. Mm-hmm , which I think is what Ramona's getting at here. Like it's the people who have done insurance the same way for, you know, 30, 40 years they need to be, they need to hear some other ideas. I think that is important to get those people in, uh, Sharon, who said, have you set an embrace? Have you seen an embrace of API technology to help insurance companies transform, uh, and improve customer attention? Loyalty? The short answer is yes. Uh, we do see a lot of API technology. I think that, um, almost all, uh, digital transformation, uh, obstacles are seen, uh, are seeing those same things that we talked about throughout the presentation here, uh, in terms of priority and budget and, uh, will, uh, Jerry, who is from Buffalo, uh that's where it's college and where my brothers live, uh, said, uh, talked about, um, employers looking the unicorn who checks every item on their wishlist and has unrealistic expectations.
Nathan Golia: (
I actually think that is also correct. Um, I've just, I've just doubled the size of digital insurance staff, Janet, right. And like, you know, we're looking we're people coming in and, and uh, you know, I was, , it's actually kind of funny because I actually had, uh, a, you know, some really good candidates come in. Um, but I also had really good candidates who, when I made the offer, turned it down cause they had gotten another offer. Um, and uh, like, yeah, like, uh, there's a lot of, there's a lot of great people out there and sometimes you don't wanna get hung up on candidates or on expecting a certain thing because, um, you know, a lot of people, like I said, are, do wanna work are enthusiastic if you're selling your company as, as a place where you can innovate. Um, I think people will, will be excited to join you.
Nathan Golia: (
Um, anyway, Jan, I know we're minute over. Um, so, but I just wanted say thank you so much. Um, you know, Jenna and her team do such a great job of, of getting these surveys in the market, getting the data to us, showing to the editors in a way that we can actually understand. Uh, we love seeing it. We, we really do. We do love, uh, being able to see this, this, this data come back and tell us about what, what what's on our audience's mind. I hope that, uh, if you're here and you enjoy this transformation form, you'll stick around for the ones coming in the future, uh, using our new, um, membership option. We're having our extended stats. You're getting, you're gonna be getting more content like this. You're gonna be getting more content on the site. Um, we're really excited to, uh, help continue to tell the story of insurance, digital transformation. Any last words for you, Janet? Or are we all good?
Janet King: (
No, thank you. This has been fun. And I look forward to doing more of 'em in the future. So thanks Nate.
Nathan Golia: (
Thanks so much. Have a good day, everyone.
