Orchestrating Technology Transformation in Commercial Insurance: Part 1

August 14, 2020 | Ashish Lall

Historically, commercial lines insurers have been slow to adopt technology compared to personal lines insurers or their sister industries of banking and financial services, primarily relying on broker-driven, highly manual processes. Even today, commercial lines are dependent on face-to-face interactions, paper documents, and legacy systems that can’t provide the rich functionality that today’s business users demand. 

Interestingly, small businesses and personal lines insurance seems to have a larger appetite for technology and automation. The reason? Underwriting process in the personal lines sector mainly revolves around the assessment of various homogenous risk classes governed by the law of averages. Here, the focus is on shaping the portfolio experience rather than approaching individual risk exposure. Clearly, the entire cycle of policy management operations can be automated far more easily.

For large commercial insurers, however, underwriting involves evaluating individual cases as risks are more heterogeneous, and they often require bespoke coverage. However, though this needs manual underwriting with additional support through risk management services, technology can play a decisive role in helping commercial insurers make consistent, accurate, and informed decisions in underwriting, pricing, and claims.

Doubling Down on the Opportunities

The importance of personalization or a ‘personal touch’ in any business relationship is indisputable. And, the broker-underwriter relationship is no different. Of course, the use of technology and automation for transactions and information sharing does not preclude that.

Technology simply makes transactions that require underwriters and brokers to exchange input and output with each other—such as data compilation, submission clearance and set up, and policy issuance—more efficient and transparent. For instance, submission e-mails, invoices, and additional information can be shared on an integrated data-sharing platform that both parties can access securely, easily, and at any time. Such a streamlined framework enhances productivity and visibility, while strengthening the underwriter-broker partnership.

Advanced business-automation platforms such as MarshConnect serve as an excellent example of how an online portal can be used to capture critical policy information to facilitate the seamless processing of all major types of commercial insurance, and disseminate risk-management related data between underwriters and brokers.

Navigating the Headwinds

Flexible working schedules are an important factor that fuels the need for rapid technology adoption. Like all sectors, the insurance industry is also witnessing a rise in non-fixed working hours, part-time work, contingent working, and remote work policies, in part prompted by global events such as COVID-19. This has pushed insurers to accelerate digitization and look for integrated platforms or applications that can help increase employee productivity and output.

For the broker-underwriter engagement, adopting an end-to-end (E2E) automation system can be an ideal way forward for brokers to push relevant information to their clients through a portal, instead of having to resort to email. These ‘exchange’ systems don’t seek to entirely replace physical meetings, rather they are an attempt to limit physical proximity-based challenges and fortify relationships through increased trust and transparency.

In an era where process automation can help organizations reach new heights of personalization and convenience, these gradual adoptions are poised to foster a strong technology-driven commercial insurance system.

Read the next blog in this series to learn how intelligent automation and next-generation technologies are helping insurers transform data processing.

Ashish Lall is vice president of corporate strategy at Xceedance.