Navigating Between Cost Savings and Crisis-Led Innovation Based on Real-Time Customer Data Insights Is Much Simpler
The pressure valve of insurance digitization is starting to burst. Over the past five years, P&C insurers have lost an average of $4.2 billion in underwriting profit¹. Worse yet, profits on personal auto lines are expected to plummet by 40% from their peak within 15 years¹. To offset these challenges, leading insurers are turning towards real-time customer analytics, RPA, automation, and IoT. In fact, insurers that adopt real-time data analytics and automation early in the claims journey see 15% higher customer satisfaction rates, 30 percent lower claims costs, and four percent higher overall payment accuracy¹. Better yet, insurers willing to embrace digitally transformative solutions see 2-3% higher EBIT growth compared to their same-sized competitors.
In other words, harnessing the power of customer-empowering data reporting and dashboards doesn’t just help you cut costs and boost productivity; it breeds a culture of innovation that can help your business navigate the proverbial ocean of insurance challenges.
RPA + Real-time Customer Data: Fostering Agility in Insurance
Did you know that 40 percent of P&C expenses are locked up in roughly 20 to 30 core processes²? Here’s the silver bullet: around 50% of those core processes can be partially or fully automated³. Robotic Process Automation (RPA) offers a way forward. In fact, McKinsey suggests RPA provides the single largest automation lever for insurers. Picture a claims process where routine tasks (e.g., data collection, cleansing, processing, etc.) are completely automated. Any of those mundane, repetitive, and ultimately life-sapping tasks employees spend far-too-many-hours tackling are all perfect targets for RPA.
Imagine a digital claims system where RPA robots perform real-time reviews on every claim. Then, the data from these claims is automatically processed into other core systems in your stack. Suddenly, your front-end claims process is digitized, automated, and targeted. Better yet, picture a digital self-service portal that uses RPA and real-time customer data insights to generate best-fit policies for insurance shoppers. These aren’t mid-horizon dreams. Digitized, RPA-based systems with in-depth data reporting and dashboards are immediately valuable⁵. According to McKinsey, RPA and automation cut the costs associated with the claims journey by 30%¹.
There are plenty of opportunities outside of claims processing. In fact, data analytics and automation give your business the chance to understand, please, and engage with customers in profound ways.
Real-time Data Reporting and Dashboards Generate Superb CX
Whether you’re trying to tempt first-time buyers to sink their teeth into a policy or you’re luring customers away from competitors, the Customer Experience (CX) is your golden ticket. Walker’s prophetic prediction that the customer experience would overtake price and product by 2020 is certainly bearing fruit⁴. Auto-insurers with top-tier customer service and experience see 30 percent higher revenue⁶.
Real-time customer data — blended with a heap of analytics and reporting — is a CX engine. When policyholders (or future policyholders) contact you, they want results, fast. Simple solutions like digital policy matching engines and claims status tracking tools can be massive. McKinsey notes one major insurer that cut claims status request calls by over 50 percent simply by giving customers case-tracking tools based on real-time data¹. It’s challenging to pinpoint exactly how powerful real-time data is for insurers.
Some use cases of real-time data in insurance include:
- Tracking when a homeowner puts their house on the market to better adjust their policies
- Using IoT/smartphone sensors to adjust auto policies based on behaviors
- Personalized marketing campaigns and policy targeting
- Tracking policies to detect house-sharing via websites like Airbnb to mitigate risks
- Minimizing fraud by leveraging RPA and AI with real-time data
The sky is the limit.
When we discuss technology like RPA and real-time data analytics, it’s difficult to boil solutions down into singularities. Every insurer is unique. The ways you leverage this technology will depend on your size, industry, and structure. So, most insurers will leverage custom-built solutions rather than catch-all platforms. While the initial investments may seem off-putting, the risk of missing the digital transformation train is far more frustrating and cost-draining.
Are You Ready to Digitally Transform Your Insurance Company?
RPA, data reporting, dashboards, real-time data, IoT, analytics, and other data-driven technologies are reinventing the insurance industry. As insurers struggle to find profitability, offsetting costs and improving satisfaction via tech is a clear path forward. Unfortunately, a significant number of IT projects fail. Insurers can’t always spare the IT resources or time to tackle these transformative journeys. After all, you still need to focus on the core.
We can help. At OZ, we bridge the gaps between technology and usability. Our world-class team of consultants and tech leaders can help you find, build, or utilize the right technology to transform your insurance company. Contact us to learn more.
Sources:
¹ https://www.mckinsey.com/~/media/mckinsey/industries/financial%20services/our%20insights/time%20for%20insurance%20companies%20to%20face%20digital%20reality/digital-disruption-in-insurance.ashx
² https://www.mckinsey.com/~/media/McKinsey/dotcom/client_service/Financial%20Services/Latest%20thinking/%20Insurance/Making_of_a_digital_insurer_2015.ashx#:
³ https://www.mckinsey.com/featured-insights/future-of-work/jobs-lost-jobs-gained-what-the-future-of-work-will-mean-for-jobs-skills-and-wages
⁴ https://walkerinfo.com/cxleader/customers-2020-a-progress-report/
⁵ https://www.mckinsey.com/industries/financial-services/our-insights/restore-and-reimagine-digital-and-analytics-imperatives-for-insurers
⁶ https://www.mckinsey.com/industries/financial-services/our-insights/the-growth-engine-superior-customer-experience-in-insurance
