The COVID-19 pandemic is a “defining moment” for the insurance industry in that it has illuminated insurers’ inefficiencies in both their inward and outward facing digital capabilities. It has forced innovation on the industry more or less overnight, and has triggered a steady flow of changes revolving around remote work capabilities, low-touch automation opportunities, and the golden ticket – the customer experience.
These are not new themes. Insurers have been discussing technology and innovation like machine learning and artificial intelligence (AI) for a number of years – all with an eye to improving operational efficiencies, reducing complexity in high-touch areas like claims, and providing the slick and easy customer experience that people have grown to expect in the digital age. The COVID-19 pandemic has merely injected a sense of urgency and a call to action for those yet to progress beyond the ideas stage.
One roadblock getting in the way of many insurers’ digital transformations is their “lack of focus,” according to Colleen Wells (pictured), vice president of product strategy at Sapiens International Corporation – a global insurance software solutions provider. Too often, firms are trying to find the magic solution that will fix all of their pain points in one go, but Wells believes insurers need to approach innovation with more of a laser focus.
“Some companies really struggle to pinpoint what they want to achieve; it’s so scattered in terms of what their business strategy is and what they’re trying to solve,” Wells told Insurance Business. “I’ve seen it so disparate in terms of insurers trying to focus on too many areas, and therefore, not making big enough strides in innovation to make a significant impact. Instead of being really laser-focused, striving for things like being the best possible insurance provider for agents, or processing 100% of auto claims in an automated fashion, some companies are trying to solve everything in one go - and that actually slows things down.
“We are so risk averse as an industry that we don’t want to fail - and I think that’s a mistake because we’re not embracing the power of what digital can really provide. If you really look through a true digital lens, you’re going fail all the time, and it’s going to be OK because you’ll learn from that failure, and your processes will be much more improved because of it. But at the end of the day, you have to have a goal in mind and it needs to be a business strategy […] with a sole focus.”
One thing that Sapiens has been focused on, which Wells says might help insurers fine-tune their focus, is really helping companies understand what they mean by the word ‘digital’. In this day and age, the word ‘digital’ is used so generically that every insurer means something different by it. To help form their digital strategy, Sapiens has launched a business consultancy program with the core focus of helping insurers to understand exactly what they’re trying to achieve through digital innovation from a business perspective.
“At Sapiens, we’ve been very focused on ensuring that from a core offering perspective, we’re very open and we have the tool set and the capabilities to help carriers achieve [digital] self-sufficiency,” Wells added. “People often talk about how slow-moving the insurance industry is and how risk averse it is, but the truth is, there are pockets of innovation happening throughout the industry, and that was pre-COVID, during COVID, and it will continue after COVID. It’s everywhere, and all these adjustments that we’re making are really leading towards significant innovation. As an industry, I think insurance is poised to make some huge changes.”