Insurance Technology
Article | August 9, 2022
Kennedy's Elizabeth Bardsley discusses the risks brokers need to be aware of as more and more professionals work from home as a result of the coronavirus pandemic. As the insurance industry continues to grapple with the Covid-19 pandemic, many have begun to give thought to what lasting changes will stay with us once the crisis has passed. For example, attitudes towards flexible working are expected to permanently change as more and more professionals work from home. And in a similar vein, we are likely to see a significant impact on the popularity of cyber and digital liability policies.
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Insurance Technology
Article | July 20, 2022
Insurance customers look for result-driven insurance services and products. To meet those demands and grow revenue, insurers need to move beyond conventional methods and envision their insurance business' customer interaction as aiding in the management of product and service deliveries. This necessitates a cloud-based strategy for future-ready operations. This is where the concept of cloud insurance comes into play.
Insurers are receiving signals that the moment has come to invest heavily in the cloud ecosystem. But how? Read about it in the following points.
The revenue landscape is shifting
Investing in cloud infrastructure allows insurers to gain a competitive advantage in new revenue streams. In addition, it depicts a protected sphere where all the insurance business operations are risk-free, free of cyber risks and intrusions.
Digital distribution appeals to customers and capital
Customer-centric innovations, such as product distribution or cloud-enabled services, draw investors' attention. This results in increased revenue production.
Why is There a Need for Cloud Insurance Solutions for Businesses?
Insurance businesses face numerous obstacles in a continually shifting market position each day. As a result, insurance companies must primarily respond to the demanding and rising needs of customers. Cloud technology provides accurate solutions for the same.
Let's look at the need for cloud solutions amid the trending approach.
Customers expect personalized products, services, and experiences to support chosen communication channels like social media, a website, or a portal. Consequently, insurers need to improve their “speed to market” approach, which is possible through cloud technology and provide competitive products and services.
Furthermore, sales growth remains under constant pressure. As a result, cost reduction is another eye-catching feature for insurance companies. By streamlining procedures and operations under one roof, decentralized, and digitalized, cloud insurance best suits to decrease costs and expenditure.
Not to forget, globalization demands insurance businesses be more flexible and agile to win new markets and obtain new prospects. Cloud insurance infrastructure solutions are critical today and, in the future, to achieving all of these objectives.
The Insurer’s Viewpoint is Critical for Success
According to the report, leaders are more likely to use Cloud SaaSs, big data, AI and machine learning, and the Internet of Things (IoT). However, given the findings of the aforementioned study, it is clear that moving to the cloud is merely a baby step on a long journey of technological advancement.
Cloud computing has emerged as a critical tool for digitization, and the significant challenges posed by the COVID-19 issue have highlighted the benefits of cloud computing."
Peter Heidkamp, Head of Technology at KPMG.
The Internet of Services and SaaS as a service is particularly appealing to insurance businesses when it comes to cloud insurance (SaaS). In addition, SaaS licensing options allow customers to obtain software to reduce internet and operational costs.
The real use cases or benefits of the cloud are:
Business scalability and flexibility
Increased customer satisfaction
Optimizing business processes
Cost reduction
Encourages business backups
Cloud Insurance: A Wake-up Call for Opportunities
Cloud technology and its solutions enable insurers to leverage cloud capabilities and resources to stay abreast with market developments. The technology meticulously encourages customized products and services on time, develops corporate networks, and implements new business processes with high revenue.
However, adopting cloud solutions is not always an easy decision for insurers, but those that overcome security worries can reap the benefits of cloud insurance. Therefore, utilizing cloud solutions is a continuous journey that necessitates constant innovation and adaptability.
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Insurance Technology
Article | July 19, 2022
It is common knowledge that there is virtually no industry that has been immune to the effects of COVID-19. The global pandemic has caused massive shifts in individual and industrial behavior and will continue to do so in the months, if not years, to come. The P&C industry, like many others, is reeling from the effects of the virus. Amidst all these events, it is important to assess how the insurtech industry is going to be affected by COVID-19.
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Insurance Technology
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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