Digital transformation upends insurance companies … for the better

Digital transformation upends insurance companies … for the better | Insurance Business America

Digital transformation upends insurance companies … for the better

The retiring of legacy systems, combined with the pressure of changing consumer expectations and technology innovation is pushing insurance companies to take steps in their digital transformation journeys to serve clients better and improve behind-the-scenes efficiencies.  

For each company, that journey looks a little different depending on what they hope to accomplish at the end of the day, and what pain points they have to begin with.

“Brokers are entering data in our systems, they’re classifying risks, and we’re relying on their expertise to properly classify a risk. At times, either because they’re moving very fast or because they don’t have enough knowledge of how to classify a risk, they may misclassify a risk,” said Kardiner Cadet, senior vice president of StarStone’s ecommerce division, and a Duck Creek client. “We’ve implemented artificial intelligence to confirm what they’ve entered in the system.”

For example, AI capabilities will catch if a broker classified a ‘family’ restaurant as one that doesn’t serve alcohol. However, that same restaurant could serve alcohol on the weekends, which means the risk hasn’t been accurately captured.

“Understanding that nuance through AI has been transformative for us. It’s allowed us to cull our book of many risks that we otherwise would have written,” explained Cadet, adding that at the same time, adding those capabilities hasn’t changed StarStone’s broker-facing interface, which remains as seamless as ever.

Another step in StarStone’s transformation has been getting a better understanding of the data that the company has in its systems.

“Having access to the data has allowed us to have insights that we otherwise would have never even thought of,” said Cadet, pointing to a statistic based on data that shows after three days from when a broker starts binding, a deal often falls off the table, which means they can get more out of an account within those first few days.

It’s been three and a half years since StarStone embarked on its digital transformation journey with the help of Duck Creek, and the company has learned a ton during that time.

“Initially when we started doing the AI work, we opened the flood gates. I wanted to know everything there is about these risks, which is good to know, but does it really matter? All of this extra information was flooding us, and it was preventing us from actually looking at what really matters,” said Cadet.

AXIS Insurance has meanwhile gone through its own transformation, which its CIO of Insurance IT, Darryl Catts, presented on in detail during Duck Creek’s Formation ’19 conference. The past four years has been full of change for the company as it upgrades its platforms, looping in various applications, and allows its partners to write more profitable business, while being more efficient in the jobs that they do to deliver a better product to AXIS customers.

Read more: The right technology partner can help carriers outlast market challenges

“One of the major things we’ve seen with our underwriting is that we’re able to shift work from underwriters in the system, who are keying in things and generating policy documents, to our operations group,” said Tim Bibler, VP and North American IT business lead at AXIS Capital. “We have the operations folks now doing those tasks that they were doing in the legacy applications, which is freeing up the underwriters to go out and deal with the brokers directly, write more business, and do the things they really need to do to expand their book even more profitably.”

With such a big transformation program that necessitates multiple work streams, it’s inevitable that there would be challenges for AXIS.

“We knew we were going to have, being in the specialty business, pretty complex custom specialty products,” said Bibler. “Duck Creek really allows us to take advantage of the complex product architecture that allows us to build out our technical and marketable products, and then take things like coverage for cyber, and very quickly apply it to other marketable products.”

Before starting the transformation journey, all team members need to be on board, from the top of the organization all the way down.

“When you have these great ideas, you assume that people will immediately buy into this fantastic idea, but, quite often, they don’t understand what you’re doing and they may not even trust that it’s coming from a good place because there have been so many people who’ve implemented technology with the approach that they’re going to cut out humans,” said Cadet, adding that it’s important to get the chief officers to communicate to their teams that there’s nothing to fear. “We just want them to make decisions faster with better data and more consistent data.”