New-Age Technology Adoption - EVRY

W H I TE PA P E R

New-Age Technology Adoption how can it be a real game changer for you in the insurance industry?

NEW-AGE TECHNOLOGY ADOPTION - W H I TE PA P E R

Abstract Today, the insurance world is as dynamic as never before. While the challenges are increasingly fierce for insurance companies to keep up with the competition and propel ahead, the consumers (especially the millennial population) are at a critical juncture too. They are expecting a better service and quite a few tangible benefits from their carrier as they buy coverage — the result of which is skyrocketing of customer expectations. Most insurance carriers — under these demanding circumstances — have started moving to a customercentric business model, while also ensuring profitability of operations and regulatory compliance as their other top priorities. No wonder in this digital era “Digital Transformation” has taken a front seat to ably support the carriers in their battle for survival. It is imperative for insurance carriers to know the rationale behind any such digital initiatives, the expectations from it and a proven approach to drive the same.

NEW-AGE TECHNOLOGY ADOPTION - W H I TE PA P E R

Understanding the evolution of IT in the insurance industry In the first phase, insurance carriers have been through with the arduous task of heavy weight product implementations, legacy modernizations, core suite upgrades, package solution implementations, large data warehousing projects, various connected peripherals system implementations, etc. resulting in an ever-increasing complex IT ecosystem. Then came the upheaval of SOA and BPM suites, which definitely had their own advantages from an operational standpoint. However, these also mostly ended up in long drawn projects with their own share of disadvantages — typically high levels of effort, risk and cost implications for insurance companies. Mobility projects topped the CXOs’ priority list, though not necessarily always driven by a central “enterprise-wide” strategy but more as a sporadic and ad hoc requirements perspective. DW & BI projects have also been no less on the complexity scale.

On the whole, alongside success, the industry has also seen many instances globally of failed implementations and half -hearted approaches. They consumed much of the allocated IT budget of insurance companies before turning the tide. Not only the new entrants in the insurance industry but also the incumbent companies had put their innovative thinking hats while constantly feeling the pressing need for adoption of emerging, break-through technologies in all aspects to facilitate business — better and faster. Gradually, many contemporary innovations in the InsurTech space have announced it “loud and clear” that the insurance industry has reached the tipping point. InsurTech not only promises a superior technology but also a customer-centric and unconventional business model of the future.

Technology in a new avatar Relentless advancements in the technology space have continuously empowered industries to adopt to the changing business requirements. Insurance industry is no exception. Over the last few years, in particular, a handful of impactful technologies have hit the insurance world. Together they have created a futuristic solution space that has the potential to provide unprecedented benefits to the businesses.

NEW-AGE TECHNOLOGY ADOPTION - W H I TE PA P E R

A closer look at what has changed Why should we say that technology is in a new avatar now? What exactly has changed? The thought process behind IT adoption to modernize insurance enterprises has changed as much as the solutions themselves. As this technology revolution has surfaced, a strategic approach is required to choose what is right for your business now. This is a blessing in disguise for carriers. Though it appears as a hefty challenge to embrace new ways, it opens the door to find new opportunities as well as leapfrog the competition.

While there is no guesswork required to say that insurers need to invest more in the upcoming technology, the real tricky part here is how to get the best returns? A mere blind fit of technology will not work, irrespective of how path-breaking and powerful the technology is. The application of that technology is crucial. This is where lies the importance of the role of a digital transformation expert.

Drive to move to faster, light-weight and insightful business solutions

Legacy Modernization

Product Suite Implementations

Data Warehousing

Core Version Upgrades

SOA / BPM Integrations

System Integrations

High-risk, high-cost & long-implementation cycle times

IT investments in the insurance industry Using IT spending as a percentage of premium, Celent estimated that global IT spending by insurance companies will reach USD 184.8 billion by the end of 2017. According to SMA, IT spending in 2017 will increase by 60% and during 2018-20 it will increase by 67%.

Light-weight, selective solutions

Claim Analytics

Robotic Process Automation Chatbots

Social Media Insights

Customer Experience Toolset

Device Integrations / IoT

Fraud Analytics

NEW-AGE TECHNOLOGY ADOPTION - W H I TE PA P E R

EVRY’s Digital Consulting Framework A typical problem that most insurance carriers face is “Where and how do we start?” EVRY’s Digital Transformation experts will answer this question for you. Digital Transformation can be effectively implemented by following a strategic and sequential approach that starts with conceptualization of possible solutions and logically progresses until the point a complete transformation roadmap is attained.

Philosophy

01 Conceptualization

02 Bucketizing the change

03 Deep-dive Experimenting

04 Transformation Roadmap Planning

The business needs, transformation readiness and appetite for change vary from enterprise to enterprise. Though EVRY has a standard framework and a proven set of principles to guide insurance carriers on the transformation roadmap, this is a collaborative effort. EVRY conducts action workshops by involving key stakeholders from both business and IT teams of the customer’s organization, during the entire consulting engagement, wherein right from conceptualization to prototype validation is planned across the entire digital transformation spectrum.

NEW-AGE TECHNOLOGY ADOPTION - W H I TE PA P E R

01

Conceptualization

Digital Transformation for an insurance enterprise is conceptualized from three different perspectives that can give a holistic effect: • Process Effectiveness • Business Insight • User Experience Insurance is a process-heavy as well as data-sensitive business. Also, with the new customer-centric model end-user / consumer satisfaction is a priority. Any digital initiative, therefore, must focus on either increasing process efficiency, generating

Departments

Existing IT Ecosystem

Policy

Legal

Systems of insight

Accounts

HR

Systems of engagement

Billing

Procurement

Systems of record

Claims

SIU

UW

Recovery

Sales

Marketing

actionable insights from organization’s data or rendering unprecedented consumer experience. It can also be a combination of all three. Business pain / gain areas are usually spread across various departments of the enterprise e.g. an insurance company might have a goal as specific as “to transform only their claims function” with the target of productivity gains. But in order to accomplish that, it is recommended to have an eye out for any opportunities to transform other departments / divisions such as Procurement, SIU, Recovery, Legal or even Accounts. The big picture is important to conceptualize any change by doing an effective impact analysis. Then EVRY identifies and recommends business areas where transformation is required.

Process Effectiveness Can low value-add, high volume errorprone tasks be automated?

Business Insight What different data sources can be utilized to process relevant information?

Process Effectiveness How to enhance customer experience across important consumer touchpoints?

NEW-AGE TECHNOLOGY ADOPTION - W H I TE PA P E R

02

Bucketizing the change

03

Deep-dive  Experimenting

The next step, after identification of the business area to target, is to categorize it into process, analytics or user experience bucket. It depends on the specific business area. Transformation of Claims Division calls for changes around process streamlining, improving claims and fraud insights as well as delivering superior claims experience to the customers. On the other hand, Sales & Marketing Transformation could be about streamlining the operational process and devising intelligent channel analytics solution. It really depends on the insurance company’s requirements and their intent — to what level of details they would like to go.

Once ideas have been conceived that address specific business problems and they are categorized into process effectiveness, business insight or user experience bucket, then EVRY drills down to the next level. This means elaborating the idea, defining the exact problem statement, ideating multiple solutions to choose from, building a proof of concept (POC) and validating the same with business users.

Often as a part of the initial due-diligence, there should be sufficient inputs across each of the three broad categories to further elaborate on.

• is light-weight and easy to execute

The key consideration being a valuebased solution such that it: • is precise and addresses a specific business need • is robust and scalable

Process

Analytics

Empathise

Define

Understand behavior and experience of business users through observation, interaction & stakeholder interviews Define problem statements and its impact caused to the business thereby establishing needs and end-user expectations

Ideate

Explore a wide variety of possible diverse solutions, to address problems with a range of ideas

Prototype

Create proof of concept (POC) from the ideas shortlisted and discuss with users

• has a shorter implementation timeframe • is a calculated risk i.e. it can be phased out by means of early pilots

User Experience

Validate

Use observations and feedback from business users to refine prototype in interations and make it ready for development

NEW-AGE TECHNOLOGY ADOPTION - W H I TE PA P E R

04

Transformation Roadmap Planning

Even with the final set of digital initiatives identified, there are other challenges further down the line. Often, the operational aspects of Run-the-Business compulsions result in challenges to think of and prioritize Change-the-Business initiatives. EVRY’s Digital Transformation consultants help you take stock of your business problems and priorities and identify project candidates for leveraging digital technology solutions. This also helps you avoid a “big-bang” approach to your Digital Transformation journey with minimal investment for a pilot and a consequent lowering of the associated risks.

A word of caution Often, enterprises make the mistake of rushing into digital initiatives before analyzing business-as-usual. EVRY recommends that even before getting started to conceptualize transformation, it is essential for any insurance carrier to weigh out their major business areas and prioritize what needs to be addressed first. e.g. A particular insurance company may be performing as per industry standards in terms of their claims processing, as measured by standard metrics, but it might be lagging in terms of sales and marketing when compared to its competitors. The first business case for a digital transformation here ideally should be targeting customer acquisition more than anything else. From a business perspective, there are usually four key aspects that render itself for an effective digital transformation, as shown below:

Smarter Customer Acquisition

Business Delivery on Digital

Consumer Experience

Informed Business Decision Making

NEW-AGE TECHNOLOGY ADOPTION - W H I TE PA P E R

EVRY’s Next-Generation Insurance Offerings

Advanced digital platform to empower agents attract consumers

Virtual assistants in the form of chatbots to help consumers anytime, reduce call volumes and enhance customer experience (CX)

Smarter Customer Acquisition

Business Delivery on Digital

Seamless Consumer Informed Business Experience Decision Making

Virtual workforce of front office and back office robots bringing in intelligent automation for claims intake, claims assignment, payment reconciliation, quote generation and many other core processes

Omni-channel journey analytics platform that brings together digital technologies along with insurance industry’s expertise to help brands identify their CX index and establish a customer-centric culture

NEW-AGE TECHNOLOGY ADOPTION - W H I TE PA P E R

Conclusion

About EVRY

The future is even more exciting. With the rapid advancement of technology and an anticipated steep growth in insurance industry’s investments into the disruptive transformation arena, it is quite evident that there would be no looking back from here on. Cutting-edge technology like advanced image processing, capturing digital imagery by drones, etc. have already started making their way into our lives. Software Robots are made more intelligent with every passing day and the insurance industry is all set to embrace a virtual workforce in the near future. Change is the only constant. The real essence therefore is to keep adapting from an enterprise perspective and ensuring readiness at all times to take the next big leap.

EVRY is a $1.5 billion Nordic IT major having 8,500+ employees and is a preferred partner for Enterprise Digital Transformation. Our 2,000+ dedicated employees, supporting operations in the USA, Singapore, India and group offices in Europe, are ready to collaborate with you in driving Digital Transformation.

About EVRY’s Digital Insurance Practice • Insurance is a major focus vertical, providing specialized services for 15+ years • Delivered 70+ business solutions to Producers, Carriers and TPAs • Matured, highly-skilled consultants with 95% workforce certified in respective fields • In-depth domain expertise in Property & Casualty and Life & Annuity Insurance • In-house Digital Innovation Lab, to stay ahead in the technology game

Author Abhishek Mukherjee Offerings Head - Digital Insurance

For more information about all our solutions and offerings, get in touch with: USA Headquarters: EVRY USA Corporation 1425 Greenway Drive, Suite 490 Irving, Texas 75038, USA Phone: 972-514-1113 / 1-844-9-EVRY-USA Fax: 972-514-1109 [email protected] www.evry.com/us

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