How can the insurance industry use automation to respond to post-COVID pressures?
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Many commercial and general insurers are feeling increased pressure to accelerate their digital agendas, as the economic realities of the COVID-19 pandemic are felt across the world. This has been coupled with a significant shift of customer and client interactions into digital channels, experienced by over 50% of business leaders surveyed during research for our latest whitepaper. In order to effectively meet client demand in digital channels, organisations must take a new approach that reflects the current situation, rather than simply speeding up existing digital and automation programmes defined pre-COVID.
For a sector which has often - rightly or wrongly – been viewed as slow to embrace innovative approaches, there are many recent examples of tactical ‘quality of life improvements’ emerging, as well as smart devices to support customers. Technology has been used to enhance claim submissions, through delivering more effective personalised communication to customers, providing service to high-risk groups such as young drivers, and increasing the capability of digital assistants to answer common queries (before shifting to human service for greater support).
However as the COVID-19 pandemic caused major disruption to customer behaviour and colleague working patterns, strain on digital channels to deliver a higher proportion of service alongside less predictable demand has caused many firms to question whether they are delivering a differentiated service proposition that’s scalable and, perhaps most importantly, profitable.
Are insurers thinking broadly enough?
Many firms have so far used automation and digital technologies on a tactical level to solve specific and immediate problems across the customer lifecycle. Effective automation solutions have been deployed, such as enabling payments to be taken with staff working from home and shifting higher proportions of document signing to online services. However very few have reimagined how solutions can support customer journeys in a post-pandemic world.
Fresh challenges are also presenting themselves, such as the notion of ‘core hours’ being called into question. As client and customer schedules become more flexible and adoption of more digital propositions in other aspects of life continues to increase, there will be less tolerance for disjointed experiences, unnecessary friction or delays.
We see three key areas which insurers need to address in order to move forward:
Many insurers have grown through acquisition, bringing a litany of different systems, data types and approaches together, along with additional management and back-office procedures.
While this current state of working has been just about manageable for many, the introduction of automation technologies will provide a real impetus for change to reduce variation and achieve real scale and impact.
Before moving forward, businesses should take the time to reassess how to bring together work into one common approach, ensuring the business is ‘transformation ready’.
Unite around a common purpose
Data, technology and change teams often work in siloes but now, more than ever, they should be united in pursuit of a common goal. More often than not, colleagues at all levels lack enough of an understanding of the transformation agenda, how they can play their part in supporting it and the benefits to them. Other priorities, and in some cases performance incentives, can end up competing with broader strategic objectives to diminish the sense of a common purpose.
Take a flexible approach to technology
Firms have found themselves either taking a ‘big systems’ approach, with development taking years and having few opportunities to test, or taking very fleet-of-foot tactical approaches that enable short-term wins but fail to deliver long-term strategic objectives. We have found that it is possible to take much more flexible approaches to technology, provided that the strategic picture is clear and every component has a clear purpose as part of well-designed customer journeys.
The untapped opportunity
Intelligent use of data and automation can unlock a pathway for insurers to develop, test and scale propositions fit for a post-COVID world. There are three areas where insurers can start in order to understand the specific opportunities available:
1. Continue implementing tactical improvements to test and learn
While remaining agile, new approaches must be aligned with broader strategic opportunities and customer journeys, understanding the end-to-end consequences of implementation as opposed to a ‘move fast and break things’ culture.
2. Understand where technology and people are best placed along the customer journey
Instead of seeking to digitise existing journeys, taking an approach that blends digital and human service where appropriate will deliver more profitable outcomes. Understand where human discretion and judgement can add most value, for example tracking claims can manifest as a powerful differentiator and avoid ‘demand loops’ as issues are never fully resolved.
3. Be focused with the change agenda
With ongoing financial pressures, a sharp focus to ensure both resources and attention are deployed in the most effective areas is vital. If activity doesn’t support your objectives, its purpose should be heavily questioned.
Keeping a strong focus on core strategic objectives and the customer journey throughout will ensure that you move with renewed pace and uncover profitable, scalable solutions.