According to a recent report by Accenture, 66% of executives in the insurance industry say that “the pace of digital transformation is accelerating,” and even more say that the technology they use is “inseparable” from their business model. But that transformation isn’t happening evenly across the industry, and a large gap remains between legacy organizations and fintech or insurtech startups.
McKinsey points out that “the industry’s average product release time has ranged from nine to 24 months—a glacial pace compared with that of startup companies, which can deploy code daily and run dozens of A/B tests a month.” Insurance companies that don't act now to adopt modern practices and technologies will quickly fall behind.
However, it isn’t a zero-sum game, and both startups and legacy institutions have a lot to learn from each other. Established companies bring consumer trust and deep expertise, while startups bring new technologies and perspectives. As Thomson Reuters puts it, “Fintech startups and banks are benefitting by coming together rather than competing in the market.”
Here are three things you can do to make sure your company stays ahead of the curve and evolves along with the rest of the industry:
Win the War for Talent
It’s no secret that insurance companies can struggle to attract and retain top talent. That may be due to a perception that the industry is “boring” or that it lacks the flexibility and forward-thinking mindset that appeals to today’s tech and knowledge workers.
As PricewaterhouseCoopers explains, “legacy insurance companies and InsurTech startups often have very different ideas about cultural norms for behaviors such as risk tolerance and how decisions are made. “
Insurance companies can address this issue by embracing new technologies that make employee’s lives easier. For example, if document overload makes it difficult for front-line insurance staff to get the information they need to help customers, they may benefit from using an AI-powered knowledge management system like Sage. Sage uses machine learning and natural language processing (NLP) to find timely answers to insurance questions in fragmented information across thousands of documents, even those that are updated frequently. This reduces the amount of time insurance workers spend on tedious tasks like calls to managers—and frees them up for more rewarding conversations with customers. Indeed, Sage can save staff as much as 5 to 10 hours per person every week, increasing their sense of achievement and job satisfaction.
Minimize Operational Losses
Operational losses due to claims leakage is another area where insurers that embrace AI-powered technologies are rapidly outpacing their competitors. IBM reports that the insurance industry loses as much as $30 billion per year due to inefficient processing of claims.
Many insurers overpay because they don’t have enough information to determine the accuracy of a claim, or because information discovery and management is at odds with the need to thoroughly review policy documentation.
Machine learning tools that are specifically trained to understand insurance terms can help insurance staff quickly find and interpret dense or confusing documents. Additionally, with the right AI tools, staff can can predict potential leakage as each claim comes in—and then allocate claims to the right handler based on priority, skills, and experience.
Keep Customers Happy
Primed by their experiences with companies like Venmo and Amazon, modern consumers have come to expect fast and convenient digital experiences. And they’re not about to let financial services providers off the hook.
Already, many fintech companies leading the way. Innovative app designs with engaging visuals and plain language, for example, make it easy for customers to understand how they’re spending their money. In another example of a modern digital experience, Australian neobank Up explains how they chose to use conversational language during the sign-up process (i.e., “What is your mobile number?”), rather than a traditional application form. Their goal was for customers to be able to open an account, verify their identity, and start using Apple Pay in less than three minutes.
There’s an opportunity for insurtech to do the same. With AI-based tools that incorporate optical character recognition (OCR) and natural language processing, companies can parse complex insurance policies and immediately explain them to the customer.
Customers don’t want to wait around to get the information or services they need. To stay competitive, insurers need to be able to deliver fast underwriting decisions, respond quickly to support requests, and make continuous product improvements.
Bring Your Team up to Speed
There’s a common thread between reducing operational losses, winning the war for talent, and keeping customers happy—and that’s technology.
With the help of an AI-powered knowledge management system like Sage, your front-line workers will be empowered to do their jobs more efficiently, improving their own job satisfaction and delivering a better experience to your customers. Request a free demo to see how it works.
Mitja Alexander Linss is the Sr. Director of Marketing at ProNavigator. He frequently writes about knowledge management, information discovery, artificial intelligence, and InsurTech.