Are yesterday’s insurance processes limiting today’s business growth?

Insurance companies reliant on legacy underwriting processes are falling behind high achievers leveraging insurance innovation.

Carriers burdened with legacy technologies and outdated manual processes are severely limited by losses due to fraud and operational inefficiencies. Cumbersome application and underwriting processes further restrict revenue growth. That’s why leaders in the insurance industry are poised to invest heavily in digital technology in 2022, according to Deloitte’s 2022 insurance industry outlook.

In the same report, a case study of Mitsui Sumitomo Insurance revealed that the company’s AI-powered “agent support system” increased agent productivity between 20% and 130% compared to conventional sales models. The system generated 860,000 individual and 80,000 corporate sales leads per month. In short, digital transformation is significantly driving business growth for forward-thinking insurance leaders like Mitsui Sumitomo by:

• Limiting losses.
• Reducing risk.
• Optimizing insurance processes.
• Stimulating sales.

We’ll look at each of these business growth drivers in greater detail.

How digital fraud detection curbs losses for carriers and customers

Fraudulent claims create extra costs for insurance companies and consumers to the tune of $80 billion every year. Traditional high-touch fraud detection processes like special investigation units are effective but time-consuming. They’re also no match for fraudsters using machine learning to hack legacy underwriting processes. A robust digital platform for insurance carriers can systematically screen for dubious claims using predictive analytics logic, flagging fraud earlier with fewer false positives.

How telematics and data analytics facilitate proactive risk prevention

A proliferation of data sources – both internal and alternative – paired with advanced data modeling and artificial intelligence equip insurance companies to take a preventive approach to risk from the initiation of transactions onward. With more accurate risk profiling at the outset of transactions, carriers can tailor insurance coverage for maximum value to both company and customer. A 2021 Bain & Company brief on the future of insurance predicted technology-enabled risk reduction could “propel global insurance premiums to $10 trillion by 2030.”

How digital portals optimize operational efficiency and improves claims accuracy

Legacy claims workflows are mired in operational inefficiencies that leave both insurance professionals and customers feeling frustrated. The AI/ML capabilities of insurance portals optimize end-to-end claims management. They equip carriers with more data points for quickly and accurately assessing damages and settling claims. Digital portals offer a quick way for customers to solve simple problems. Adjusters and insurance experts are then able to prioritize cases that require a human touch.

How data enrichment improves sales and customer experience

The insurance industry was an early adopter of technology. In fact, few industries are as rich in consumer data. However, in legacy systems, all that data is too cumbersome to utilize effectively. Digital portals equip insurance carriers with tools for parsing data and gaining valuable insights into consumer behaviors. With this information, agents can present customers with highly personalized and innovative insurance products. Technology makes white glove personalization a possibility without overburdening agents.

Jesse Gospodarek is an independent sales and marketing consultant with Management Research Services, Milwaukee. He may be contacted at [email protected].

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