You do not have to look far to discover that the insurance industry is going through a period of enormous disruption and transformation.
PWC has produced a series of publications Top insurance industry issues in 2021, saying: “More change has occurred in the industry in the past year than in the previous several years combined and its pace is only accelerating.”
It lists these as: improving distribution, determining an insurance company’s role in ecosystems; finding and retaining talent; applying a holistic organisational view to refine underwriting; and implementing a flexible architecture for alternative models.
Analytics software company, SAS says the insurance sector has seen significant disruption and innovation over the last five years with the most dramatic changes relating to the Internet of Things (IoT).
“In every insurance sector, IoT promises to substantially reduce losses and transform the relationship with policyholders. For example, recent automobile insurance commoditisation has placed downward pressure on premiums. And IoT allows insurers to provide value-added services, such as driver feedback, that can lead to a closer, more proactive relationship with policyholders while generating new revenues.”
IoT might be driving the most dramatic change, but it is only one manifestation of the overarching driver of digital transformation/disruption impacting almost every industry.
Manifestations of digital transformation
According to PWC, manifestations of digital transformation in the insurance industry include digitally enabled sales, direct-to-consumer engagement, automated advice, digital underwriting and automated claims adjudication.
Other manifestations are:
– Customers’ demands for online channels of communication with service providers of all kinds, and for real-time information
– Increasing legislative demands for data security, especially customer data
– The potential, and the imperative to exploit big data for competitive advantage
The impact of big data
Insurance has always depended on data to enable it to assess risk as accurately as possible. Modern data analytics tools enable many more factors, and many more data points, to be incorporated into risk calculation than was previously possible. But the latest developments combine the power of data analytics with the power of artificial intelligence and machine learning, to greatly amplify the power of human data scientists.
A 2020 OECD report The Impact of Big Data and Artificial Intelligence (AI) in the Insurance Sector canvassed the use AI in many areas of insurance saying it “has the potential to improve the efficiency of processing data and making decisions in terms of both contracting and claims processing, …. and where there is interaction with consumers, and where transaction costs are particularly high … efficiency gains could be had.”
In addition to these challenges, insurers face specific challenges in running insurance projects. And a lack of resources to adequately address these challenges leads to sub-optimal responses.
For example, a lack of human resources for a project means insurers plug the gaps using labour hire firms. Dealing with inflexible vendors means insurers have to devote more resources to managing the vendor relationships, and instead of vendors carrying project risk under a contract, the insurer has to manage this off contract.
To manage these challenges, exploit new opportunities and achieve successful digital transformation insurers need to enhance and optimise their core systems to make their businesses more agile and enable the digital transformation that is essential for survival.
SaaS Platforms to the rescue
They need a software platform that helps them engage personally, innovate freely, and grow efficiently, such as Guidewire, Duck Creek Technologies or Majesco, all which can be delivered under a cloud-based software as a service model.
Guidewire is the world’s most widely used platform for property and casualty insurance carriers. It is used by more than 400 insurers from new ventures to the world’s largest and most complex. Guidewire combines digital, core, analytics, AI and the largest R&D team, services team and partner ecosystem in the insurance software industry.
4impact introduces their 4i Expert Insurance™ teams
Australian technology and consulting services company 4impact has deep experience in the complexities of insurance projects including Guidewire. In fact, 4impact has the largest, and most experienced Guidewire specialist team in Asia-Pacific and delivered the very first Guidewire implementation in Australia.
4impact has delivered a wide range of quality Guidewire projects for major insurance providers in Australia and New Zealand.
To give focus to their specialisation areas within insurance, 4impact have recently wrapped up their insurance heritage and expertise under the guise of 4i Expert Insurance™.
4impact’s 4i Expert Insurance™ teams operate a flexible distributed working model across three offices in Brisbane, Wellington and Manila, enabling it to tap into highly-skilled onshore and offshore talent, to scale rapidly up or down to meet client needs.
4impact prides itself on its focus on customer needs and culture, eschewing from the usual ‘cookie-cutter’ approach to projects.
4i Expert Insurance™ teams have an intimate understanding of Guidewire and the insurance business as a whole, and it is this level of experience and insight which ensure all of their projects leave a lasting, ROI focused positive legacy across all aspects of business: core systems, policy and claims management; motor and home assessment; call centre and telephony; compulsory third party; distribution; regulation & compliance.
Discover how 4impact’s 4i Expert Insurance™ teams can help your digital transformation journey and optimise your business for success across your portfolio of projects.