Reprinted with permission from PIA Management Services Inc.
Published in the April 2019 issue of Professional Insurance Agents

Millennials and Generation Z are used to Amazon-like immediacy. And, they expect no less from their insurance providers. Professional insurance agents already have seen a surge of new, cloud-based insurance company disruptors gain market share; they’ve seen a growing population of tech-savvy millennials using apps and mobile for almost every aspect of their lives; and they’ve become aware that data intelligence can help them be more competitive and gain market share.

Technology is driving the insurance industry’s future— pundits call it Digital Insurance 2.0. Digital transformation is apparent in many aspects of insurance—most using a twist on artificial intelligence and supervised machine learning tools. From claims processing and assessments to disaster recovery, privacy, compliance, prevention and even individual health monitoring, insurance organizations are turning to technology to help boost profits and customer experience, while minimizing security risk.

The InsureTech Connect 2018 conference offered educational sessions, panel discussions and vendors representing all of these trends. Industry partners throughout the globe; and insurance providers who attended the conference all agree: insurance professionals want and need to learn about smart technology solutions to take their organizations to the next level.

As insurance providers navigate the fast-paced, high-tech Digital Insurance 2.0 world in 2019 and beyond, here are some trends to watch.

Onboarding data for analytics

Professional insurance agents can use technology to help their clients make better decisions about their insurance coverages. Data on clients, their property and more is available, but it can be buried in files, PDFs, databases and emails. In fact, Gartner estimates that more than 80 percent of enterprise data is unstructured, which means that it can’t be searched. Insurance companies are clamoring for AI or machine learning tools that can transform data into a format that agents can use to determine trends quickly; process claims; and expedite inquiries. Enterprise content capture and data discovery tools are becoming a growing necessity. Consider investing in this technology if you haven’t done so already.

RPA/IPA

Robotic Process Automation and Intelligent Process Automation are the freshest buzzwords. Also known as, the digital workforce, the intent of RPA is to minimize the amount of human intervention required on repeatable processes, office workflows and operational tasks. Efficiency is the name of the game, and IPA is the pinnacle of the evolution of the digitally transformed workplace—especially insurance.

Gartner predicts that, spending on RPA software will reach $1 billion by 2020, growing at a compound annual growth rate of 41 percent from 2015 through 2020. McKinsey explains why RPA is taking off: RPA helped one large insurance cooperative to reduce excess queue procedures affecting 2,500 high-risk accounts a day, freeing up 81 percent of free-time equivalents to take on proactive account-management positions instead.

Given the success of RPA technology, insurance professionals should look for solutions that make RPA tools even smarter and more effective. When other intelligent software pairs with RPA, it gives leeway to IPA, which offers a more innovative and comprehensive option for digital transformation.

Driving analytics with data

Imagine having insurance data from claims, weather reports, landscaping, alarm history and more. Once data is structured and aggregated, dashboards and analytic tools can help insurance professionals make smart decisions. Predictive analytics, which also use AI and machine learning algorithms, can help make significant reductions in loss ratio and expenses while growing the top line. For example, insurers can reduce expenses by using third-party data to predict outcomes and enable more targeted use of the data, such as motor vehicle reports, property inspections and credit reports. They also can use this technology to generate quotes more quickly, which often can be the difference between winning a new customer.

Aerial drones and planes

Natural and unnatural disasters happen. Surveillance drones and imaging have become sophisticated in collecting all types of data through video and images, allowing for quick response times, and making it safer for first responders. Assessing damages is faster, which can expedite claim payouts to help customers in need. Consider investing in drones as well as training for your staff to maximize the use of this aerial technology.

Security, compliance and regulations

Insurance is a heavily regulated industry, and AI and machine learning tools can help detect anomalies; meet compliance standards; accelerate audits; aggregate data from multiple sources to protect investments; and prevent fraud, data and security breaches. AI-based cyber defense systems for entire networks are seeing major growth as insurance organizations realize the heavy fines and risks for not protecting their confidential and sensitive data.

According to a KPMG survey of more than 100 insurance CEOs, “less than one-in-five believes their organization is fully prepared for a cyber-event. And 42 percent think cybersecurity is their most pressing risk, far outweighing their concerns about other key risk areas such as regulatory risk.” While this survey was published a year ago, it recognizes that security, compliance and regulations remain a serious concern.

GDPR

Legacy insurance companies have unfathomably large document databases and records management systems. We worked with one insurance underwriting firm that had tens of millions of documents stored in six different policy administration systems; six different claims systems; and six different billing systems. While secure, these databases and files often are disorganized and no one is accountable for them. Even for companies with far smaller databases, data hidden within these documents is notoriously difficult to track and extract.

The recent adoption of the General Data Protection Regulation by the European Union and similar U.S. based initiatives like the California Consumer Privacy Act of 2018 mean insurance companies are going to need to be able to find, extract and even redact a customer’s information on-demand. How can you do this if you can’t locate all of the information they shared with you?

Insurance professionals are going to need to do a lot more than institute clean-desk policies or add a privacy policy disclaimer to their websites. Insurance professionals need to consider adopting a combination of solid online encryption programs; IT infrastructures; the latest in smart document capture and data discovery; plus old-fashioned discipline to keep that content secure.

Hybrid cloud platforms

While moving to full cloud solutions for all aspects of the business may be the ideal way to move forward, making a business case for this move might not be attainable if an insurance agency can get by using its existing, on-premises enterprise systems.

Vendors with multiple solutions offer insurance professionals an alternative by using their existing on-premises solution and off-loading specific tasks or functionality into the cloud to process. If there is high-volume data being processed at certain times of the month or of the year, the data can be processed in the cloud, and then returned into the on-premises system to finish its workflow. An example could be during hurricane season when damage claims need to be processed quickly. The benefits can be impactful by helping those affected by a disaster quickly and are worth consideration.

Stay updated

In this fast-paced, high-tech world, insurance professionals need to stay on top of the latest technology to help make their businesses more efficient, secure and customer-service friendly. Before you migrate your data to a cloud-based server; build a new website or app; or hire additional IT staff, be mindful of new policies and technological advances that can help drive your business in the digital insurance race.