5 Emerging Trends for Insurance in 2020

When it comes to implementing new technology, the insurance industry is rarely considered an early adopter. However, insurance companies have been taking early strides, somewhat in a migratory manner, to adapt to technology advances to help better run operations, improve underwriting and risk management, enhance customer offerings and services and profitably grow the business. Taking into account this early progress, we look to 2020 and several trends in the industry that have begun to take shape and will accelerate this coming year: From RPA to IPA Whether stemming from insurance carrier frustration that basic robotic process automation (RPA) — bots mimicking human tasks — hasn’t produced savings relative to carrier aspirations, or from insurance carriers’ increased understanding of machine learning (ML) and artificial intelligence (AI) capabilities, the industry will see an increase in "intelligent" process automation (IPA) that is more robust and combines the bot with learning, evaluative and decision-making capabilities for greater impact. This shift will be driven by carriers looking for higher business returns by solving a wider range of problems in the manual activity value chain with automation. From Point Solutions to Digital Ecosystems While today’s "exploration era" in insurance — characterized by new technology proofs of concept, use of point-solution providers and insurtech accelerators — has generated some progress and buzz, it comes with a down side. Single-solution or shiny software objects that address an individual problem or portion of the business will soon become too confusing and difficult to manage, actually creating a gridlock in carrier movement to true transformation. The fact is that no single solution can bring about transformation on its own and will instead require a sum-of-the-parts approach managed in a smart ecosystem. Similar to a conductor’s role in astutely incorporating the needed instrument — which in and of itself can only perform one thing, as a trumpet can only make trumpet noises — so too will orchestrated digital ecosystems begin to take priority as carriers look at enterprise platform solutions versus traditional bolt-on approaches. See also: 3 Phases to Digital Transformation   From Data Warehousing to Data-in-My-House As an anonymous poet once said, “It is a great day when one discovers the beauty that lies within oneself.” So, too, will carriers be focused on unlocking the value of their own information that has accumulated over time. The focus on data infrastructure, lakes and warehouses now takes aim at using the very data that has been collected or can be mined — particularly the plethora of historical in-house data that has been generated by the carrier itself in the execution of risk evaluation, providing coverage, taking losses, servicing inquiries, etc. Content management systems and capabilities will start to transform into intelligent management systems with outputs infused into future-facing decisions and actions. Using AI and content mining capabilities to convert traditional in-house "flat" files — policy, risk and loss reports, correspondence, etc. – into usable insight, combined with the continued use of outside data and emerging sources (such as the Internet of Things), will enable carriers to take a significant step in becoming analytics-driven businesses. From Digital Customer Experience to Digital Risk Management While the term "digital" is used — and even overused — in a variety of contexts, many would agree that the digital movement was and is centered on digitizing the customer experience. Making things easy for the customer, creating experiences that will keep them coming back, and identifying customer service as a top priority are all common objectives in insurance, and a great deal of digital emphasis is placed on these initiatives. However, the heartbeat of an insurance company is effective risk management — and quite often, the most reluctant to join the digital parade are chief underwriting officers (CUOs), not because they’re grumpy progress-stompers, but because they want to ensure that good risks are put on the books and that underwriting disciplines and philosophies are upheld. Not enough digital ambitions have been focused on the CUO world, and that is where digital convincing needs to occur to bring them on board and excite them about digital. As a result, while digital customer experience will remain a priority, emphasis will broaden toward using digital technologies — be it AI, data analytics or risk assessment technologies — for a better underwriting result. Digitizing phases of the underwriting process to optimize underwriting time capacities and drive consistency of risk assessment and decision-making will be more in focus, adjacent to making customers happy. From Call Centers to Intelligent Customer Interaction Centers Customer servicing enabled by natural language processing, AI and voice assistants, such as Alexa or Siri, will become more common. This customer call automation, combined with web and email channel automation technology, will move carriers toward omnichannel customer interaction management that is driven by technology engines. This shift will be driven by carriers looking for efficiencies in workforce management, faster customer issue resolution and tracking of customer interaction data to improve products and services. Given these other trends, carriers will be looking more to an outside perspective —outside of the insurance industry, outside of traditional insurance approaches and outside of traditional insurance vendors and suppliers. Insurance companies move as somewhat a pod, and, historically, the benchmarks of what constitutes progress and advancement has been focused on others in the pod. Over the next year, we’ll see a shift toward the new benchmark, which is now the broader world, other industries and the digital economy being built outside of insurance. This is the economy customers of insurance carriers are experiencing in their worlds — whether they are individual or commercial buyers of insurance — and their expectation of what insurance should be or should look like is shaped by these outside forces. As a result, insurance carriers will need to rely more and more on partners in 2020 who may not be traditional vendor insiders, but outsiders who have helped create digital ecosystems in other industries and enabled digitally born companies.