How to Outperform with Insurtech
What can you do to outperform during a significant shift in the insurance industry? We’ve gathered the most important tips on insurtech usage that will help you succeed.
A drastic shift is happening in the insurance industry, and you can probably sense it. IT systems adopted over 2 decades ago are becoming inefficient. They’re even becoming a hindrance with what you need to do in your business. You can’t continue using it as it is. One day it might just let you down.
And of course, there are all these megatrends, like mobility, IoT, big data, and machine learning knocking at your door. They force the urgent shift of your value chain and innovation. Hence, you must think of changing existing products or launching new ones to make sure your company doesn’t get left behind.
Finally, there are issues you need to resolve with your clients and teams. On one hand, they are becoming more demanding in regards to multi-device usage, high usability, and personalization. While on the other hand, their motivation is dwindling and they’re considered inefficient in digital realities.
So what can you do to outperform during such a significant shift? We’ve gathered the most important tips that will help you succeed with insurtech. So keep on reading.
Insurtech: Build Or Buy?
#1. Don’t Build An Insurance Solution
We know many companies try to build their systems from scratch. In fact, it happened to one of our clients. In the attempt of building something internally, they ended up spending millions of dollars. Yet, the system was still unable to meet their business needs due to growing complexities. As a result, the CIO was fired.
A new CIO appeared within weeks. Initially, he started looking for ready-existing solutions on the market. Subsequently, he researched (rather) well-tested solutions in a similar market. This led him to call us at Cloud Insurance. After analyzing the initial IT architecture that they had attempted to build internally, we were not surprised that the project did not succeed.
So if you have thoughts on building your solution from scratch, we suggest you reconsider. There’s a high chance you’ll lose a lot of time, energy, resources, and still end up empty-handed. Find out more in this article>>.
#2. Avoid Non-Insurance & Immaturity
We know you want to find a great solution for your company. We want that for you too! This is why we strongly advise you to avoid beta-tested platforms. Yes, they offer you lots of features. However, more often than not, the necessary features such as comprehension or compliance will be missing.
The same advice applies to non-insurance systems. We know many companies that invest in these, only to later struggle with tweaking and tuning them to fit their specific insurance needs. As a result, they end up with a more expensive solution that doesn’t meet industry standards.
One of our clients tried to turn a CRM system into an insurance solution with the hopes of making it more suitable for his business needs. The problem is that CRM providers, similar to other non-insurtech vendors, usually have very little knowledge about legacy and compliance.
So, if efficiency and efficacy are important to you, please don’t consider a non-insurance solution. Once you find a proper solution that fits your needs, review its maturity. Be proactive at the discovery phase. Sign up for a demo, get details on features, and test out its substance.
#3. Choose A Scalable Solution
You might have found a system that has all the features you need today. Well done! Next, check if it is scalable. There are many old-fashioned systems on the market. Therefore, the ones that may be a good choice for you today, will not necessarily serve your business needs tomorrow. In the future, you might end up stuck with a system that hinders innovation rather than enabling it.
Therefore, prioritize solutions that lie in between immaturity and old-fashionedness. This balance will help you minimize risk while allowing for flexibility and innovation.
To diagnose a solution, start with a company. Meet its developers, ask how often they update their system and get some user case studies. Ask yourself if they have structured the API procurement processes. Also, keep in consideration your IT team within the system. Will they be able to use it as a layer for further development? You should be aiming to gain a long-term partnership with your vendor so you can mutually benefit from each other.
*Bonus Tip From Our Client
“Look for a solution that helps automate your business processes and at the same time, remains flexible and user-friendly. Make sure system users, such as product owners or claim handlers are able to make changes without the involvement of your vendor.”
Pål Fosland, SVP Sales, Insr Insurance
IT Project Execution
#4. Start With An Insurance MVP Or A Pilot
Once a new technology provider is in place, test how you work together. Each organization has its own approach. Therefore, you need a vendor that matches your style of doing things.
Start with a narrow scope. Plan a simple MVP or a pilot project. It lowers risk and gives you a quick way to test a vendor. Afterwards, you can always apply the results of this experiment to ensure success on a larger scale.
#5. Plan With Delays
You may have faith and trust in your team. However, this doesn’t instantly protect you from experiencing delays. Many companies, like yours, experience delays, especially during the data migration stage. A lot of data needs to be moved from the existing platform to a new one. And this involves both complexity and risk. Adapting this data to a new system might simply take too much time.
To prevent this type of delay, your vendor should have a proper migration tool. Discuss it with them in advance to understand how experienced they are in migration processes.
#6. Prepare To Measure The Impact
Once you’ve invested resources in the insurance system, you need to set up your tracking systems. Think about the top metrics you want to track. These may include time-to-market, cost of operations, revenue growth, sales, length of operational activities, customer satisfaction, or any other ones you find important.
Gather your team and set a baseline for your measurement. How long does it take to launch new products in the market? How fast can you set up a new distribution partner? How much time do claims handlers spend per claim? Consider these and other questions related to your operations.
Once you have a new system in place, you can measure its impact on different areas of your business. Also, some insurance systems (like Cloud Insurance) have reporting modules available. Those will help you get insights on particular metrics and trends over time.
#7. Analyze: Before vs After
Collected your data? Then it’s time to analyze it and compare it to your (set) baseline. Based on this comparison, you can make bigger conclusions for different areas of your business.
Here are some examples of results you could get with an insurance system. According to the McKinsey Report: Automation can reduce the cost of a claims journey by as much as 30%.
Once you have your numbers defined, you can prioritize your next steps. With a tech-savvy business strategy, you’re more likely to lead your organization to become more flexible and innovative, while making your mark and achieving your career goals.