From payer to partner: transforming the insurance promise

Before tack­ling how trans­for­ma­tion should occur, it’s vital­ly impor­tant to under­stand why trans­for­ma­tion is need­ed. Accord­ing to Roland Schar­rer, group chief data and emerg­ing tech­nol­o­gy offi­cer, AXA, it’s because the fun­da­men­tal rela­tion­ship between insur­er and insured is chang­ing. “You’re build­ing a part­ner­ship with the client and you shouldn’t be seen just once a year.” This is part of AXA’s ‘from pay­er to part­ner’ strat­e­gy. 

“The more con­sumers invest in their con­nect­ed devices – cars, homes, watch­es – you’re build­ing a part­ner­ship with them,” adds James Barnard, CIO, Avi­va tech shared ser­vices and divest­ments. “Every­where they go, you’re going with them. You’re act­ing like a guardian angel.” 

There’s no doubt that there is cer­tain­ly much more oppor­tu­ni­ty through dig­i­tal trans­for­ma­tion to play a big­ger role in con­sumers’ lives – increas­ing engage­ment and, ulti­mate­ly, ROI. But it’s also a place to tread light­ly. “It’s impor­tant to be led by what the cus­tomer wants and where we think we can add val­ue to the process,” warns Ani­ta Fer­n­qvist, UK chief data offi­cer and direc­tor of oper­a­tions, Zurich Insur­ance. She notes that not every step of every insur­ance rela­tion­ship needs the ‘white glove’ treat­ment. Sim­ple, auto­mat­ed effi­cien­cy can add val­ue too.

“That inter­ac­tion point could be touch­less, it could be auto­mat­ed, it could be empa­thet­ic – it could be all three,” reveals Chi­rag Jin­dal, head of insur­ance, Amer­i­c­as, Ser­vi­ceNow. “Insur­ance is a promise and we have to wrap the nar­ra­tive of the cus­tomer jour­ney with that promise in mind. But how you wrap that around tech­nol­o­gy to deliv­er it and let the cus­tomer choose – that’s the prob­lem we are try­ing to solve.” And, he adds, “we have to be cohe­sive”. 

Here is the biggest chal­lenge insur­ers face. The cus­tomer has expec­ta­tions, set not by oth­er insur­ers but by the likes of Net­flix, Ama­zon and ASOS. They expect the process to sim­ply work. Get­ting that process to work end-to-end, what­ev­er hap­pens, is far from sim­ple. 

“You have a lot of expec­ta­tions of an Ama­zon-like dig­i­tal expe­ri­ence but insur­ance is a very com­plex prod­uct and you have to serve the client at very spe­cif­ic moments of truth,” warns Schar­rer. It’s some­thing that insur­ance com­pa­nies may have been doing for cen­turies, but while that deliv­ers a huge amount of expe­ri­ence, it also brings with it some sig­nif­i­cant hur­dles. 

“For an organ­i­sa­tion like ours, the real chal­lenge is updat­ing our core infra­struc­ture, cloud capa­bil­i­ty, robot­ics and intel­li­gent automa­tion to bridge what is expect­ed of us by con­sumers today,” Barnard reveals. Being con­stant­ly avail­able, lever­ag­ing dig­i­tal cur­ren­cy and pro­vid­ing a seam­less tran­si­tion into what can, quite often, be 70-plus years of lega­cy estate.” 

So that cohe­sive­ness that Jin­dal speaks of begins to seem like a pipe dream, giv­en the scale of the chal­lenge. The chal­lenge of bring­ing a sprawl­ing, glob­al insur­er with decades of lega­cy sys­tems and cus­tomer infor­ma­tion into a seam­less, end-to-end expe­ri­ence in a sin­gle, smooth action. 

We have to add to this that the insured aren’t just large organ­i­sa­tions, they serve a mas­sive­ly diverse audi­ence. “We have very dif­fer­ent cus­tomer seg­ments and that means one size does not fit all. We have to be real­ly clear about what real-time real­ly brings to cus­tomers, for exam­ple. In oth­er places, [the impor­tance could be] rela­tion­ship-led [inter­ac­tions] with dig­i­tal inter­ven­tions, rather than end-to-end,” Fer­n­qvist insists. 

At times, it can seem that there are hur­dles at every turn. Cloud trans­for­ma­tion, for exam­ple, is seen as bring­ing major advances in insur­ers’ abil­i­ty to over­come lega­cy issues, but it too comes with its own set of chal­lenges. “On the one hand, we need the cloud to pro­vide the elas­tic­i­ty of infra­struc­ture, scale and avail­abil­i­ty,” says Schar­rer, “and at the same time you must ensure a high lev­el of data pri­va­cy stan­dard.” And still, he adds, trans­form the lega­cy envi­ron­ment. 

How data is treat­ed in the trans­for­ma­tion piece is crit­i­cal. As a heav­i­ly reg­u­lat­ed indus­try, one might argue that insur­ance actu­al­ly has an advan­tage in the face of a data-scep­ti­cal pub­lic. Its trust is sure­ly baked in as a result of those tight­ly defined para­me­ters. Fer­n­qvist con­curs: “Trust is crit­i­cal. For us to serve [our cus­tomers’] needs, we need their data. We’ve got to be able to han­dle it in such a way that we’ve earned and retain that trust. Reg­u­la­tion helps us pro­tect our cus­tomers and make sure that we’re build­ing with the cus­tomer in mind.” 

Data gov­er­nance is, there­fore, a key con­cern and again, due to the often dif­fuse and com­plex nature of insur­ance organ­i­sa­tions, not one that is eas­i­ly man­aged. “The eth­i­cal use of data is very impor­tant. We have 18.5 mil­lion unique cus­tomers and that’s a tremen­dous amount of data. The use of third-par­ty enrich­ment has lev­elled up the play­ing field but with that comes more respon­si­bil­i­ty,” sug­gests Barnard. 

Schar­rer adds that build­ing a data-led or data-fed cul­ture is crit­i­cal. He says it’s about bring­ing “a data-dri­ven cul­ture that’s under­stood from the claims han­dler to busi­ness deci­sion-mak­ers. Bring­ing the whole organ­i­sa­tion behind that, either through incen­tivi­sa­tion or gov­er­nance, so that it’s pro­tect­ed and lever­aged as an asset.” 

Of course, it can only be tru­ly lever­aged as an asset if the right peo­ple can access the right infor­ma­tion at the right time. Organ­is­ing where data is held and how it fits into the mul­ti­far­i­ous work­flows can be a task of mind-bog­gling com­plex­i­ty, but Jin­dal has some sug­ges­tions which mar­ry close­ly with how inte­grat­ing new chan­nels and tech­nolo­gies can work more effec­tive­ly across the organ­i­sa­tion as a whole. 

“You need some kind of orches­tra­tion lay­er that can tie the bro­ker expe­ri­ence to the mid­dle and the back offices, and car­ry that across the val­ue chain,” he advis­es. “At every point of the jour­ney, every­one should know what the sta­tus is. How you orches­trate that has been the biggest chal­lenge that insur­ers are talk­ing about.” Specif­i­cal­ly from a data organ­i­sa­tion per­spec­tive, he adds: “How do you present the right data to the right per­son at the right time? You don’t want to over­whelm them. What does a claims agent or cus­tomer ser­vice oper­a­tive real­ly need to look at?” Fer­n­qvist agrees, stat­ing: “One of the big chal­lenges with data is fig­ur­ing out what needs to be cen­tralised but also how we make sure we decen­tralise to allow inno­va­tion.” 

Inno­va­tion in this con­text is key. The world is mov­ing fast and insur­ers need to be able to make the most of the lat­est tech­nolo­gies – them­selves high­ly depen­dent on qual­i­ty data – to stay ahead of the game. Schar­rer points out the use of AI to be able to ingest oth­er data sources such as doc­u­ments, pho­tos and satel­lite tech­nol­o­gy to speed up and enrich cus­tomer inter­ac­tions but warns about being too hasty and insists on the impor­tance of data qual­i­ty. “There has been an expec­ta­tion that AI solves all our prob­lems in data­bas­es and cus­tomer jour­neys. But peo­ple are real­is­ing it’s still hard work.” 

Barnard is, how­ev­er, unde­terred: “Cog­ni­tive learn­ing is a real­ly pow­er­ful tool. That’s where we start unlock­ing the val­ue of rich data and that’s come a long way in the last three years.” This whole process, Barnard con­cludes, “is a real­ly excit­ing jour­ney that we’ve only just start­ed.” 

To find out how Ser­vi­ceNow can enable dig­i­tal trans­for­ma­tion and improve expe­ri­ences in your organ­i­sa­tion, vis­it servicenow.com/transform-insurance