COVID-19: How Insurance Can Help Mitigate Business Losses through the Crisis

| March 19, 2020

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The COVID-19 outbreak is now a pandemic, affecting governments, businesses and individuals all over the world. As borders are closed, and day to day life is put on hold, it presents an unprecedented threat to the global economy and to the future viability of many businesses. Nevertheless, there are steps that organisations can take to protect themselves, and to ensure the financial consequences are kept to a minimum. In particular, businesses should be considering whether they can mitigate losses through their existing insurance policies. Regardless of the type of insurance, particular attention should be paid to notice requirements typically set out in each policy wording.

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The Benefit Services Group, Inc

The Benefit Services Group, Inc. (BSG®) is a full-service employee benefits consulting and brokerage firm. We get to the core of what is driving clients’ plan costs, and offer streamlined solutions for controlling those drivers thereby reducing costs. Our in-depth understanding of what influences behavior, and how an employee population consumes health care services, allows BSG to identify what’s working in clients’ programs and where improvements are needed.

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Will your insurance IT investments pay off?

Article | April 12, 2021

Automated claims processing, price comparison platforms, mobile bill paying—these are just some of the digital services that insurance customers expect and insurers want to provide. As the demand for digital skyrockets, so does the need for insurers to invest in IT. In the past seven years, the share of IT in total operating costs of property-and-casualty (P&C) insurers increased 22 percent. The rise of digital means technology is no longer a cost center. Rather, it is an asset that, if managed well, can increase growth and profitability. But do these IT investments pay off? As the COVID-19 pandemic exacerbates already increasing cost pressures, insurers’ IT budgets are under scrutiny; they want to see the business impact of their IT investments. Insurers with targeted IT investments achieve better growth and performance Data from McKinsey’s Insurance 360° benchmarking survey provide strong evidence of the positive business impact of targeted IT investments. In fact, insurers that invest more in technology outpace competitors that don’t pursue targeted investments in business measures such as gross written premium (GWP) growth, return to shareholders, and expense and loss ratio (exhibit). As an example, in life insurance, companies that invested more in IT saw a greater reduction in expense ratios (by 2.0 percentage points) and higher returns on technical reserves2 (1.7 percentage points) when compared with insurers with lower IT investments. Insurers achieved these outcomes within three to five years of making their investments. For P&C insurers, those with high IT investments achieved approximately twice the top-line GWP growth of low IT investors. High IT investments also produced a greater reduction in combined ratios when compared with those with low IT investment. Four areas for targeted IT investment So what kinds of technology investments can help insurers achieve growth and improve productivity and performance? Investments in four areas are critical: Marketing and sales: Marketing technology solutions can increase sales and processing efficiency, improve the quality of core customer-facing processes such as policy inquiries and policy applications, and improve customers’ overall experiences. McKinsey’s Insurance 360° benchmarking data show that tech investments in this category can facilitate top-line growth for P&C insurers by up to 20–40 percent; for life insurers, that growth could be 10–25 percent over a three- to five-year period. Underwriting and pricing: Automated underwriting fraud detection can improve the likelihood that insurers correctly identify fraud and set accurate prices. A pricing tool kit that analyzes pricing across competitors and enables a flexible, more segmented market versus technical pricing further improves profit margins. Insurers that deploy these and other product, pricing, and underwriting technologies have seen improvements in their profit margins by 10–15 percent in P&C insurance and 3–5 percent in life insurance. Policy servicing: Workflow automation, artificial intelligence–based decision support, and user experience technologies in policy servicing and within IT can improve the customer self-service experience and automate back-office processes, thus reducing IT and operations expenses. And state-of-the-art self-servicing options will reduce processing times and even improve customer experience. An analysis of programs for large-scale insurance IT modernization finds that insurers that deploy these and other product, pricing, and underwriting technologies have seen improvements in their profit margins by 5–10 percent in P&C insurance and 10–15 percent in life insurance. Claims: P&C insurers can use automated case processing—machine-learning technology trained to process basic claims cases—to segment more complex cases and significantly improve claims accuracy. Combined with better partner integration and steering technologies embedded in a transformation of the claims operating model, such technologies can help P&C insurers improve profit margins by 25–40 percent, according to McKinsey analysis of large-scale IT modernization programs. To realize the full value of IT investments, insurers must strategically allocate their resources and view tech as an asset, not a tool.

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How Are Chatbots and Artificial Intelligence Are Adding Value To The Insurance Sector

Article | April 7, 2020

Chatbots are capable of providing one-on-one consultancy to website visitors, customers, as well as internal employees. In the insurance industry, this is vital, as it is a large, complex industry that customers and employees alike may have questions about. Where do chatbots fit in within the insurance industry? One of our chatbot experts has crafted a list of key areas for chatbots in the insurance industry.

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Why Germany Is Becoming a Global Hotspot for InsurTech Firms

Article | February 25, 2020

For the uninitiated, insurance technology, or InsurTech, is the system of tools and technological innovations that are used to drive improved efficiency compared to older insurance industry models. In 2019, Germany had already begun to position itself as the de-facto hub for InsurTech firms, largely due to the uniquely collaborative nature of InsurTech startups in the country, in combination with extreme interest from international investment firms, which recognize the disruptive potential of many nascent German InsurTechs.

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Three insurtech trends to watch in 2020

Article | March 11, 2020

As the technological transformation of the global business landscape continues, more and more industries are feeling the pressure to embrace the potential of digital solutions, or be consigned to the scrapheap. In the unending quest for legacy industries to stay agile and avoid disruption, leading edge technologies are fusing with existing business models to create new, tech-driven disciplines. Fintech has been one of the great success stories of this trend, as financial institutions harness the power of artificial intelligence (AI), big data and multi-platform customer experiences (CX) to meet the expectations of their customers.

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Spotlight

The Benefit Services Group, Inc

The Benefit Services Group, Inc. (BSG®) is a full-service employee benefits consulting and brokerage firm. We get to the core of what is driving clients’ plan costs, and offer streamlined solutions for controlling those drivers thereby reducing costs. Our in-depth understanding of what influences behavior, and how an employee population consumes health care services, allows BSG to identify what’s working in clients’ programs and where improvements are needed.

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