Property and casualty (P&C) insurers must transform on multiple fronts as they adapt to the expectations of millennial customers for a strong digital experience and omnichannel integration. In this context, product and service personalization must be more tailored than ever. New pricing and distribution models are also emerging, and the so-called “sharing economy” is burgeoning across industries, from car and office sharing, through hoteling.
Underpinning all of this – and the process-related business model changes – is emerging technology. This includes both technology infrastructure and core applications, such as policy, billing and claims, as well as mobile, telematics and analytics.
In response, delivery of IT and business services is radically morphing. Many business process capabilities are now available via the cloud as business services. Infrastructure as a Service (IaaS) and Software as a Service (SaaS) are emerging to help insurance carriers boost their operational velocity while minimizing business disruption and cost.
Cloud-based service strategies can enable P&C insurers to reduce operating costs, improve key business processes and engage with customers in more meaningful and productive ways. Understanding the business benefits is key, especially for smaller, more resource-constrained carriers that can gain important competitive advantage by converting to subscription-based service models, both in terms of reducing IT complexity and costs, and introducing new products much more quickly.
Data, Data Everywhere
It is critical for P&C insurers to latch onto these changes, particularly if they want to address and proactively anticipate the needs of millennials. This generation of customers expects all products and services to equal their experiences with Amazon and the pure-play digital banks. P&C insurers can prepare by acquiring and applying insights from the metadata surrounding people, process, organizations and technology, or what we call Code Halos. By collecting, analyzing and distilling meaning from the swirl of data around their digital interactions and transactions, insurers can get to know producers and policyholders better. Code Halo™ thinking is playing an increasingly strategic role for all businesses. Just look at the growth of pioneers such as Amazon, Apple, Facebook, Google, Netflix and Pandora, whose combined market cap at the end of 2013 exceeded $1 trillion.
Code Halos can open a window into demographics and historical data, such as past calls and types of policies sold, enabling insurers to see what works, what sells and what doesn’t. By interpreting Code Halos, insurers might look ahead to gauge customer sentiment, for example, or anticipate the need for rate increases or claims assistance.
SaaS applications give insurers a common pipeline through which to collect and sift through data. Using cloud-based predictive analytics, carriers could gain greater insights into their customers and create tailored risk profiles, matching premiums with risk characteristics or influencing customers to modify their risk behaviors to reduce premiums. (Read our recent white paper on how Code Halo thinking is transforming insurance.)
The Business Benefits of Cloud-Based Services
P&C insurers can channel transformational initiatives by better understanding cloud-enabled SaaS business benefits, such as:
Ability to act. Historically, enterprise-wide system enhancements and replacements have been expensive, piecemeal solutions, often leading to disruptions in day-to-day service and inflated operating budgets as a result of system overlap. In addition, constrained resources have often required the deferral of other operational improvements. Such concerns paralyzed companies and kept them from fully achieving either goal.
SaaS solutions can overcome these impediments, especially those pre-configured with standard core capabilities (rating, rules-based automated workflows, e-signature, etc.) and priced to reduce upfront capital expenses. Sound Saas models can provide a practical roadmap for implementing strategic solutions at affordable price points and with minimal disruption.
Quick response to market conditions. SaaS solutions provide a nimbleness that neither legacy nor on-premise systems can match. Business conditions change rapidly and relentlessly in the digital era. Insurers must do the same.
SaaS positions insurers to plug into the advantages of being digital on an integrated basis across policy management, claims, billing, print and customer transactions. Built-in product configuration tools enable insurers to automate products and processes at speeds and levels of granularity rarely possible in existing systems.
Increased ability to compete. Cloud-based solutions offer a viable opportunity for all P&C carriers to embark on a strategic transformation journey. Well-architected SaaS solutions provide the wherewithal to modernize infrastructure and applications by accessing software that is integrated with the latest product configurators, rules engines and data object models.
The software is preconfigured with standard capabilities that include foundational rating and forms attachment rules, e-signatures, e-docs and rules inventories for both automated underwriting and workflow management. Interfaces to key surrounding systems such as ISO/ChoicePoint integrations help standardize data sets and business processes.
By executing a sound SaaS strategy, P&C companies can reduce operating costs, improve key business processes and engage with customers in transformative ways. Excellence in these areas is necessary to perform well in the competitive, price-sensitive, service-oriented and digital P&C insurance industry – and will increasingly be in the future.
Visit www.cognizant.com/unifiedinsuranceplatform to learn more.