Here's a general insurer in a box. Unwrap it, plug it in, put a small range of central services around it, add brand and marketing... then sit back and enjoy one of the lowest Combined Operating Ratios in the world.
This is not magic... to SciFi (InsFi?) or pie-in-the-sky, it's a genuine prospect. It's also a prospect to ponder for every insurer who isn't thinking outside the box about how they can disrupt themselves before someone else does it to them.
Anyone in the 'that can never happen!' camp only need look over their historical shoulder to city cab firms and Uber, Hotels and AirBnB, right the way back to the Pony Express and the railroad. Tech revolutions disrupt best when incumbents' inaction is cosseted in absolute confidence that it ain't going to happen!
In General Insurance, underwriting skill has effectively been outsourced to big data. It's no longer the seasoned underwriter's hunches that improve the loss ratio, it's access to analysis on an industrial scale from data aggregators. This is buyable. It doesn't have to be earned. Fraud prevention too is a data play. With products like 360Retrieve providing unstructured data analysis it's possible to incorporate every scrap of data in a claim data lake to spot dangerous claims quickly and baseless claims even faster.
However, the key to the tiniest expense ratio is digitisation and so acceleration of every rule based, iterative or communication task where human involvement isn't essential. Especially in claims. It has long been a mantra of general insurers that 'you gain customers on price but keep them on service'. Today, service expectation among claimants is not driven by past experience but by the mega-retailers who text and email every time everything moves.
With no code digital claims platforms - with 360Globalnet offering a market leader in 360SiteView - the power rests in the ability to embed the fulfilment of customer expectations into processes at high speed and low cost. So let's look close at what's inside the 'insurer in a box' and specifically about what the effects of its contents look like for the expense ratios it can produce.
1) The first building blocks out of the box are onboarding, policy inception, policy admin, fraud processes, CRM and digitally enhanced claims handling systems all integrated into one seamless whole. So, minimal call-outs to third party systems and any there are using very low friction bilateral APIs. In one step, a single system based on no-code configuration strips perhaps 70% of traditional IT development cost out of the expense ratio.
2) A no-code system means that that practitioners within the business (who don't know a line of code) can make improvements, amendments, workflow configurations and deployments without joining the IT hard coding development queue - AKA the pit of despair. The chance to test, learn, refine, segment, improve is enhanced by the ability to respond to events (ie weather surges) or hunches (ie customer or claim segmentation) in hours rather than months. This too means a more rapid expense reduction vs competitors.
3) The insurer in a box is built to suck in underwriting data from any source that can provide the best current ratings for the underwriters' appetite. It may not be quite 'plug and play' but close. The chance for the company to refine the realisation of its risk appetite is also enhanced.
4) Nothing is hard wired. Sounds too simple but effectively a move from processes running on code to processes being configured with no-code means everything can be configured, reconfigured and deployed without major expense. As the cost of change is removed from insurers' expenses, the ability to outperform competitors grows exponentially.
Every insurer in the world has a digital acceleration roadmap. The issue is that most involve pimping legacy or planning long term IT developments that are likely - in the current environment - to be out of sync with rapidly changing customer expectations by the time they are delivered.
It is like painting a Forth Bridge that fewer cars are using at the same time as the paint becomes more expensive.
The best way for insurers to think outside the box is to properly consider what an 'insurer in a box' looks like and then start to disrupt themselves along the same lines.
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