How Wholesale Insurance Brokers Can Use Social Media to Connect with Agents

Insurance Technology

Article | July 20, 2022

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.

Insurance Technology

Article | July 14, 2022

The world is facing an unprecedented situation like never before. In the span of a couple of weeks, a visually undetectable virus has wreaked havoc and driven everyone home. COVID-19 had led offices to close, the economy to slow down, and has isolated us in our homes. Zooming in on the insurance industry, the effects haven’t gone unnoticed here either. Since no one was prepared for a pandemic of this scale, people are scrambling to know what their insurance covers. Those who weren’t covered are enquiring if they can get covered now. Travel and health insurance are the specific types are making the most news.

Insurance Technology

Article | August 9, 2022

The traditional insurance business has been resistant to technological change for a long time. However, the industry has made significant progress over the last decade due to the implementation of the innovative InsurTech solution, which disrupted long-held market patterns. Technological changes have made insurers work intelligently through new strategies for attracting a new generation of customers. Embedded insurance is a trillion-dollar opportunity for insurers, giving them the chance to make new streams of money and lower their costs of distribution. In totality, embedded insurance is a new frontier of product innovation in insurance based on rising customer use of digital services. It presents a $3 trillion market potential in the finance industry. Narrowing the Gap that Existed Embedding digital into insurance eradicated all the gaps that existed before. Earlier, many customers felt a burden or found it unnecessary to purchase a one-off insurance policy to protect a new possession. In contrast, at present, embedded insurance products for customers are covered with protection against losses. This has given customers the ultimate peace of mind. InsureTech has provided insurers with improved data capture tools to conduct faster and more customized underwriting with applications. To reinvent insurance business models, embedded insurance as one of the InsurTech solutions has appeared efficient in filling the gaps in the insurance business. Most insurance companies proactively recognize gaps such as irrelevant data capture, inaccurate customer information, and sluggish data retrieval processes. Thus, they are attempting to incorporate their products into an embedded structure where they can engage with digitally relevant consumers at their chosen time and place. Hence, embedded business intelligence for insurance creates a win-win situation for both the consumer and the insurer in the future. Embedded Insurance Presents Opportunities Why is embedded insurance becoming popular? Because it empowers customers the most. Embedded insurance is beneficial to insurers seeking new ways to reach wider audience in one go. According to Bazaarvoice, a software technology company, 47% of consumers worldwide and 65% of US buyers now purchase online insurance products and services more frequently compared to the years from 2017 to 2020. Today, with the help of technology, most insurance companies now embed their products virtually anywhere through open APIs. So, by integrating products into a virtual platform, insurers can deliver personalized products within a suitable period, perform real-time risk assessments, gain data, and calculate accurate pricing. The insurers who gain this edge of benefit from technology need to be prepared to learn everything they can about their customers’ insights, behavior, requirements, and inclinations. Embedded Insurance: Today and Beyond Embedded insurance is a fantastic tool for insurers to enhance insurance penetration, particularly in the remote workspace model. However, to succeed with it, firms must find the correct balance between speed and efficiency of operations, detailed study of customer interests, and compliance with data. Having mentioned that, it is emerging as a new way to distribute insurance services online efficiently, solving the protection gap to expand in the future.

Article | April 20, 2020

Do you know what the UK insurance industry is going through? A disruption that calls for complete metamorphosis. Not so different from what the whole world is going through at the moment. Crafting one-size-fits-all products and expecting them to sell like hotcakes is a huge misconception. Customers want products to be as personalised as possible. Pay per mile insurance or lower car insurance premiums for safe drivers are some examples. In the current global crisis, personalised life insurance would look like factoring in the unique health/ living conditions of the person and then providing insurance options.