Riding the digital wave

Riding the digital wave | Insurance Business Australia

Riding the digital wave

Insurance brokers and their customers live in a digital world where almost everything can be achieved online, whether it’s buying tailored computers, getting real-time assessment of current computer specifi-cations, leveraging expert advice or obtaining consumer recommendations. The consumer chooses the channel and can swap seamlessly between them throughout the life cycle.

Yet many brokers and customers feel frus-trated that they’re not enjoying this customer- centric, digital, omnichannel experience in their daily work, says Johan Nelis, director of solution consulting for APAC at Duck Creek Technologies. Getting insurance still involves a plethora of paper forms and many manual, repeatable, and mundane tasks.

“We feel that insurance should also be digital, enabling brokers to better service their customers,” Nelis says.

Duck Creek provides core system solu-tions (Rating, Policy, Billing, Claims and Insights) to the general insurance industry, which are available either as stand-alone products or as a full suite of systems. The company’s on-demand SaaS delivery solution allows insurers to launch new products more quickly and allows the technology to support the business strategy rather than dictating it, Nelis says. He adds that systems like this are the next generation because the imperative to be creative and adaptable is only growing.

A better experience

Founded by brokers in the US in 2000, Duck Creek’s aim from the get-go has been to create insurance solutions that put brokers and clients front and centre. The company designed its innovative suite of software products to bring transparency, integration and consistency to insurance – and, crucially, put the insurer in control. “Digital insurance is driven by the expec-tations, requirements and capabilities of the three parties involved: customer, broker and insurer,” Nelis says. “We see customers are looking for a consistent experience across all channels,  an  e  ortless  service  experience  at  every touchpoint throughout the journey and a personalised experience.”

He  gives  the  hypothetical  example  of  a  baker  who  is  busy  opening  another  branch  and has limited time to enter data – and finds it  hugely  frustrating  having  to  fi  ll  in  infor-mation  the  broker  or  insurer  already  has.  With  next-generation  technology  like  Duck  Creek’s, the baker only has to give his broker limited  information  related  to  his  business,  property  and  vehicles,  which  is  then  used  to  obtain all relevant underwriting data.

If  the  baker  buys  an  asset  like  a  donut  production  line,  he  gets  a  prompt  asking  whether  he  wants  to  add  this  equipment  to  his policy. He has also installed an IoT device near  the  production  line’s  water  boiler  that  gets  a  message  as  soon  as  a  leak  is  detected,  flagging  the  need  for  immediate  assistance  and triggering the initiation of a claim.

As  for  brokers,  they  need  quick  turna-round  times  and  access  from  any  channel  (desktop,  mobile,  in  person);  a  simple  and  user-friendly  quote,  buy  and  service  experi-ence; and targeted information or content to best service customers.

Nelis  gives  the  example  of  a  broker  who  wants to o er a cyber insurance product with a  unique  set  of  coverages,  limits  and  excess. 

She wants to be able to sit down with clients and go through the options on her tablet and get  instant  feedback  on  pricing,  coverage  limits and excess. By connecting to an underwriter  who  can  see  the  screen  and  provide  real-time  updates,  the  broker  can  make  pricing  and  underwriting  decisions  within her  authority.  She  can  also  access  aggregate  insurance  information  from  similar  busi-nesses  (much  like  Amazon’s  ‘people  like  you  bought’  model),  allowing  her  to  tailor  her advice. 

“Customers are looking for a consistent experience across all channels, an e  ortless service experience throughout the journey and a personalised experience” - Johan Nelis, Duck Creek Technologies

Getting flexible

Flexibility  is  also  key,  Nelis  says  –  the  ability  to make a modifi cation if the market asks you to go in a di erent direction.

“Insurance  is  evolving,”  he  says,  “so  you  can’t design everything for the next five to 10 years; rather,  you  need  a  platform  that  has  the right architecture that is nimble, with the ability to quickly make changes with minimal effort  and  risk;  connected  to  a  broader  ecosystem  of  ever-increasing  third-party  solutions that will enhance your o  ering; and smart  –  able  to  leverage  data  to  streamline and improve your processes and outcomes.”

He  adds  that  insurers  need  digital  tools  “to  provide  omnichannel  experience  for  brokers  and  customers  –  enhanced  experi-ence leveraging automation, digitization and integration – and provide predictive analytics that assist brokers and customers throughout all facets of insurance”.

Nelis  notes  that  insurers  should  also  leverage   third-party   data   to   get   better   insights into the underwriting risk. To return to  the  example  of  the  baker,  brokers  could  assess the business’s cyber risk through auto-mated  scanning  of  all  of  the  client’s  digital  assets and identify shortcomings that prevent or  limit  risks  and  reduce  the  premium.  For  example, the behaviour of the baker’s delivery drivers could determine the premium and/or excess  for  his  fleet  and  provide  a  dashboard  with the telematics scores of each driver.

Typically,   insurers   have   struggled   to   provide this type of tailoring to the customer and  broker  because  they  were  hampered  by  legacy systems with high total cost of owner-ship  and  limited  fl  exibility.  Many  insurers  have  tried  to  overcome  this  by  commod-itising their insurance o ering, at the cost of catering to unique customer requirements.

“When  we  talk  about  legacy  systems,  we  shouldn’t  just  be  thinking  about  the  decade-old  mainframes,  but  also  newer  solutions  that  aren’t  flexible  once  installed,”  Nelis  says.  “We  heard  of  an  occasion  where  an  insurer  using  a  legacy  system  took  three  months and spent more than $1m to not ask a question in the process.”

“When we talk about legacy systems, we shouldn’t just be thinking about the decade-old mainframes, but also newer solutions that aren’t flexible once installed” - Johan Nelis, Duck Creek Technologies

In  the  past,  it  was  common  for  insur-ance system vendors to dictate how business had  to  be  run  on  their  system.  If  a  business  wanted  to  offer  more  flexible  and  innova-tive  solutions,  Nelis  says,  it  had  to  break  the  system to do that.

“But  now  you  see  more  insurers  saying,  ‘This is how I want to set up my products and process’,” he says. “Our solution allows you to say,  ‘This  is  what  the  insurance  offering  is’,  and  then,  because  the  system  is  descriptive,  it’s easier for IT to deliver.” 

Typically,  digital  change  in  the  industry  has  been  sluggish  because  upgrading  an  insurance   system   is   an   expensive   and   time-consuming  affair.  But  with  a  cloud-based solution such as Duck Creek’s, where a system is updated rather than upgraded, any amendments are almost instant.

Digitalisation   has   already   disrupted   many  sectors,  Nelis  says,  and  the  insurance  industry is no different.

“The  local  video  store  has  disappeared,  and  the  local  travel  agency  has  transformed  into  an  adviser  to  survive,”  he  says.  “The  insurance  industry  is  also  being  disrupted  –  take,  for  example,  Amazon  offering  insurance to its Amazon Business Prime customers –  hence  the  need  for  brokers  to  demon-strate their value and need for insurers to be more responsive.”

COVID-19  has  also  highlighted  some  of  the industry’s anachronistic ways of working. 

“We spoke with an insurer who stated that their staff couldn’t work without the physical files; during the pandemic, their entire work-force embraced digital within a year and have experienced  the  benefits,”  Nelis  says.  “While  insurance  has  been  around  for  hundreds  of  years,  customers’  needs  are  evolving  at  an  ever  faster  pace.  You  need  to  find  ways,  as  insurers and brokers, to ensure you continu-ously provide value.”