Here’s a new spin on the old chicken/egg question in the insurance ecosystem: Which came first, the process or the technology to conduct it? Put in those terms, this question is easy to answer, isn’t it? Process is usually prime, and technology typically serves the people who manage insurance processes and operations.
That’s why the insurtech wave — powerful as it is — will crest, break, and roll ashore. And it’s why only those companies with practical and agile workforces and people with in-depth experience will be standing when the wave recedes.
Technology is nothing new to the insurance industry. The industry was using mainframes in the 1950s and adopted databases in the 1960s. It used everything from Univac to IBM to Microsoft platforms and software. It employed programming languages from COBOL to Java. And it deployed all sorts of functionality, including everything client/server networks and cloud computing have to offer. So, in terms of utilization, the insurance industry has been around the technology block many times.
Yes, the insurance industry continues to adopt new technologies — AI, robotics, blockchain, and more. But insurance is not the first industry to adopt those technologies.
So, does insurtech herald new technologies? Some, for sure. Does insurtech imply new processes? Not as much, but insurtech can certainly make many processes more efficient. Policies still have to be rated, underwritten, bound, and issued. Claims still have to be reported, validated, adjusted, and paid. Only people who know and have conducted those processes — especially in complex commercial lines — can assess and re-engineer them, often with technology as a key enabler. Crucially, if the people who know those processes also know technology, then we’re talking about creating real productivity and progress for insurance organizations, ranging from re/insurers to brokers and program administrators/MGAs.
If you agree the appropriate order of things is people, process, technology (and we do), then what comes next should transpire in this order:
- From within or without the organization, insurers will have to find and nurture the right people, with the right knowledge, at the right time. The more quickly and flexibly insurers can avail themselves of those people and their knowledge, the greater their chances of competitive advantage.
- Process optimization, extended across the entire enterprise, equates to operational excellence. For example, partner-driven Strategic operational support (SOS), ensures insurance organizations can get the reinforcements they need, wherever they need them, from the back office to the boardroom.
- Insurers need to be well-informed and adaptable when to comes to selecting partners and technology tools to support process optimization. Given the proliferation of new technologies — whether they come out-of-the-box or from custom development — the right technology at the right time can make all the difference, provided the right people and the right processes are also in place.
Case in Point
At Xceedance, our team of underwriting technicians trained by actuaries and underwriters deliver 80 percent of an underwriter’s policy pricing-related work, leaving only the final decision-making with the underwriters. We support underwriters with risk assessment and selection, data compilation and analysis, data standardization and integration, and base premium calculation. Support from Xceedance in those tasks frees up significant bandwidth for underwriters to invest their time in writing more business and building productive relationships with brokers.
How does Xceedance create and sustain value for insurers? We are insurance experts. We don’t have a learning curve. We continuously invest in knowledge-building for our people, which includes industry-recognized certifications, insurance training programs, and hands-on learning. A deep understanding of insurance processes is a core and unique value proposition of Xceedance. We supplement that knowledge with proprietary technology tools to boost efficiency, ultimately increasing process throughput for insurers.
Does all that constitute insurtech? In fact, it’s actually “insurtech-plus” — where the connection of people (experts), process (operations), and technology (tools) coalesce to bring value to insurance organizations.
Here’s what insurance organizations can consider in their roadmap for success: People with insurance knowledge come first, followed by the processes initiated and practiced by those people, and by the technology which enables and energizes the people and their processes.
If insurance organizations follow that formula in their strategic planning, and if they work with strategic partners who have the same mindset and approach to the chicken and egg question on process and technology, then operational productivity and enterprise growth can be the natural outcomes.
Learn more about how Xceedance invigorates the people, process, and technologies of insurance organizations.
Kaushik Gohain is the vice president of insurance operations at Xceedance.