Insurers making efforts to refine tech expertise: BestReprints
Insurance companies know they are lagging in technological innovation and are moving to correct, according to a report Wednesday on a survey from U.S.-based ratings agency A.M. Best Co. Inc.
The report called Insurers: Behind the Technology Curve, and They Know It, says insurers are focusing on four key areas of progress: customer experience, legacy administrative and claim systems, data aggregation and mining, and underwriting.
Improving the customer and agent experience was ranked first by 33.3% of those in the survey, followed by legacy administrative and claims systems at 29.9%, data aggregation and mining at 22.9% and new business and underwriting systems at 10.4%.
Customers and agents have been moving to online enrollment, often from a mobile device, from paper enrollment, Best said, as web-based methods become more widely used.
In addition to experiencing problems with data quality and consistency, legacy systems also lack adequate cyber security, which exacerbates risk, Best said.
While there have been advances in data mining and aggregation, the insurance industry “has yet to tap the full power and potential of that data,” Best said. Insurance companies are working with the insurtech sector to drive advances such as cutting expenses and minimizing claims leakage due to fraud.
Data and more advanced computation together with new channels such as social media are changing the way insurance is distributed, Best said. “Big data can provide a foundation for accurate pricing through predictive modeling and can allow a company to precisely target customers.”
The Best report asserts, however, that progress must be wholistic and not siloed efforts.
“Technological advancements, much like enterprise risk management, have to flow throughout a company culture. Every aspect of the business model — modeling, sales and marketing, product development, claims management and customer service — has to be updated and kept current,” the report said.