Dortmund/Zurich | 24. January 2022
The new year brings with it an increase in the pace of change in the insurance industry. Automation, data handling, customer-centric operations and the implementation of reuulatory requirements pose major challenges. The consulting an IT service provider adesso has pinpointed the key issues for insurers.
“Actively shaping digital evolution is a significant challenge for insurers when it comes to the sales of tomorrow,” says Dr Dirk Platz, who heads up the Insurance business area at adesso in Germany. “Insurer standards, regulatory requirements and technological progress are the driving forces in this area. The potential of data is clear; it just needs to be unlocked further in 2022. This is where IT can play such an important role in success. In these key issues, we offer insight into the challenges posed to the insurance industry in 2022 from a functional, technological and methodological perspective.”
1. Ecosystem evolution: Technological advancement and customer behaviour are fostering a greater level of connectivity between insurer and customer, as well as external parties, in digital ecosystems. These ecosystems are home to products and services that generate demand independently and, in so doing, create new markets. Initial ideas have already been emerged on the insurance market, with others certain to follow. The evolution of these ecosystems will continue to gather pace in 2022, with the customer ultimately deciding which will succeed and which will fail.
2. The digital workplace: Whether it be an external workstation on a tablet computer or an office desk with a PC and a 30” monitor, all working environments share one common characteristic: They are part of end-to-end process management. The ultimate aim must be to offer users transparency over the processes and tasks they manage with their existing skills, while leading them through the process from start to finish (next best action). This creates a level of efficiency that can keep pace with ever-changing demands and offer genuine progress.
3. Data-driven insurance: Insurers have access to huge volumes of data that need to be collated and prepared for use if competitors aren’t to lose touch with digital competitors. Insurance products and services should be oriented in line with existing data pools. Reorganising often old and cumbersome legacy system environments may be a laborious task, but it is something that must be addressed. The focus here is the switch to centralised data platforms. Technological trends must be continuously assessed, taken into consideration and established if companies want to avoid losing touch.
4. Agile scaling: Agile scaling is a way of enabling large-scale projects to utilise the advantages of agile approaches. This issue is important in the insurance industry, as IT departments often have to replace legacy systems or map functional processes across the entire value chain. The individual company situation is always the decisive factor when selecting, introducing and implementing agile scaling models. Tailor-made, precision solutions are the order of the day.
5. Cloud-readiness: The cloud-based operating model is much more than than just the partial use of cloud services. When drawing up a cloud strategy, it is important to establish criteria for potential use cases that take into account the choice of infrastructure or the right hyperscalers, as well as the precision development of applications. After all, only when an application is set up for cloud-readiness in the development phase can risks such as vendor lock-in be avoided and the potential of cross-platform solutions be leveraged.
6. Software as a service: Restructuring old core systems or migrating to newer insurance platforms is a time- and cost-intensive process. Installing new functions into existing modules is often also a highly complex task. These kinds of projects take months if not years, erasing any prospective added value such as speed to market, innovation and state-of-the-art applications. Software as a service, on the other hand, is a pragmatic and easily deployed alternative allowing insurers to expand their conventional IT environment. Other benefits include simplifying set-up and operations, greater scalability, needs-based invoicing, transparent costs and cost efficiency.
7. Customer-centric claims and service processes: Claims and service processes are a major cost factor from a provider perspective, but from a customer perspective they are a means of differentiating and assessing the market. IT technologies, such as cloud-based customer portals and artificial intelligence, can help to enhance the customer experience in these processes, quickly and reliably identify baseless claims and keep costs under control in the process.
8. Sustainability instruments: In a highly aware customer environment, handling resources sustainably can give companies a competitive edge – especially as regulatory requirements become ever stricter. Sustainability can no longer simply be a marketing tool. It must form an integral part of a corporate strategy, from which processes and IT infrastructure are derived. The aim here is to combine financial efficiency with high levels of acceptance among employees and customers.
9. Digital health solutions: The Corona pandemic has promoted the acceptance of digital offerings in the health market. Since 2021, several communities have been offering the electronic patient dossier (EPD) for use. It can be assumed that the use of the EPD by service providers and policyholders will increase significantly in 2022. This opens up the possibility for insurers to offer additional services via the EPD portals and to contribute to active health management for the insured.
10. Low-code and RPA: Process automation through low-code and robotic process automation (RPA) is set to become an increasingly important success factor for consistent, efficient and high-performance solutions in 2022. The advantages of the technology are clear: Developers can make functions available more quickly and do not have to invest as much time in the technical groundwork. What’s more, this technology supports agile operations and allows companies to benefit from close collaboration between specialist departments and IT. Proper internal preparation and coordination is the key to success for insurers when it comes to process models and responsibilities for quality assurance and integration.
adesso has more information on digitalisation opportunities and how to implement them in the insurance industry on its website: Digital transformation is changing in the insurance sector