The benefits and efficiencies of digital transformation on the general insurance industry
In July, Marcia Le Roux of SSP gave a fascinating talk at CN&CO’s monthly InsureTalk session around navigating your way through the current technological landscape. SSP is a global software provider for the insurance industry with offices on six continents and – we’re proud to say – a client of CN&CO’s in South Africa.
Here’s an extract from Marcia’s talk:
By Marcia Le Roux, SSP
Efficiency in digital transformation within the general insurance industry enables insurers to reduce costs, improve customer experience, increase agility, leverage data for decision-making, and enhance collaboration with external stakeholders. These factors contribute to competitive advantage and long-term success in an increasingly digital and customer-centric landscape.
Inefficiencies in these factors have greater consequences in how an insurer –
- Communicates with the broker
- Configures products
- Manages customers and
- Integrates their business ecosystem
These are some of the areas where inefficiency has an impact:
Leveraging on a convergence of data, technology, and human capital could transform underwriting inefficiencies into a multiplied value creation. Driven by the need for efficiency and evolving customer expectations, most insurers have been moving steadily toward greater digitisation. Underwriting has been a key focus area: Most insurers have actively been upgrading their underwriting capabilities with more advanced technology and expanded data sources.
Fragmented data with a legacy system that is inaccessible prevents insurance companies from drawing out the value and making data work through actions. Under the current IFRS 17 requirements it is also now more important to access data that is relevant and easy to retrieve, and to provide reports to comply with these audit requirements.
Payment and collections
Insurances are going digital to mitigate a slow and delayed transaction process. Many insurers already accept inbound premium payments from policyholders. Now outbound claims payments are also catching on. These changes will bring benefits to both insurance companies and insurance customers with the goal to be a convenient, intuitive, and seamless user experience.
But there are still challenges to face such as a fragmented customer experience (when using a third-party vendor for digital payments, for example, a fragmented customer experience is possible); a complex integration path; limited resources for an insurance company to develop a digital payment system in-house; security and compliance (especially these days, when data breaches and cyberattacks have become commonplace); and lastly a platform to support multiple payment methods.
Offering multiple payment methods for both premium and claims payments is convenient for policyholders, but it can make things more complicated for the insurance company. Accounts need to be reconciled and any discrepancies found and resolved quickly.
To lessen the impact of legacy issues, it is important to have a digital system that offers real-time data, line-item detail, and aggregated reconciliation that make analysing payment activity and reconciling accounts quick and easy.
Ultimately, inefficiencies in these four areas have far-reaching consequences, influencing how insurers interact with brokers, configure products, engage with customers, and integrate within the broader ecosystem.
Embracing digital transformation and addressing these inefficiencies is pivotal to thriving in the evolving insurance landscape.
Watch Marcia’s talk below: