What is a Digital Platform for an Insurance Company?
I hear the word "Digital" all the time and I often wonder if people really know what it means. At a large services company I worked for, the company wanted us to create a digital platform for insurance. We put a team together to brainstorm and I asked the 10 person team to submit to me their definition of digital. No joke, I got back 10 different answers. Most were anywhere from 5 to 30 pages of explanation!
Now, this is not a a criticism. We often hear buzzwords about "digital" and then we accept the various definitions within our thought processes. Many of these buzzwords may or may not be related in any way to the insurance business. Another reason folks get confused about digital technology within the insurance industry is that there are several different types of insurance companies, each with a distinct operating model.
Customer centric processes is one very important aspect of a digital platform but first you have to define who your customer is. Think about it, a Specialty company that works through MGA's will have the MGA as their customer. Not the retail agent and not the insured. So, what type of digital strategy should you have if you are a Specialty company? Often, the MGA has their own system to process quoting, policy, billing and even claims. I will talk about this in another article.
How about a standard personal lines and commercial lines carrier that distributes produces with the Independent Agency system? Their first line customer is the Independent Agent. Not the insured. Why? The Agent most often owns the book of business and can move that business to another carrier at will. That said, this type of insurance company can still implement a digital strategy aimed at not only the Agent but also the insured. That said, it's critical to make sure that you think about that Agent throughout the brainstorming process and include them into any automation workflow that you design. An example would be when building a multi-channel quoting system, it is important to incorporate an omni-channel capability. What do I mean by that? Most companies have some level of multi-channel capabilities such as quoting via web, agent, email, CSR, etc. but do they all share data that can be seen through all actors within the workflow and acted upon? That is where omni-channel comes in. Make sure that the agent can see and act upon (within compan required parameters) any interaction that the insured has triggered. This keeps your agent happy and your insured happy. I will talk more about omni-channel vs multi-channel in another article.
Direct insurance companies or companies that utilize their own agency force will generally own the book of business. I will address these types of companies in another article.
Now, this article isn't meant as a primer on building an insurance digital platform, but what I want you to come away with is that there is not really a singular digital model that fits all companies. You have to consider who you customer is and what other actors need to be part of the flow of work and data access, what level of function you want to provide, how much automation you want to build to reduce costs, brainstorm on developing the workflow and look at the various technology components (RPA, AI, Chatbots, Telematics, etc.) you want to add. Be careful here because you do not want to go down an investment path that takes you down a black hole.
One day there might be an out of the box digital platform for insurance companies that can be configured relatively easily but we are not there today (as of the end of 2018). In the interim, we can certainly make some bets that get us incrementally where we need to go without breaking the bank.