‘Legacy insurers can’t go digital overnight’
The pandemic has changed the way legacy insurance firms conduct business, even as it throws up concerns on coverage terms. Some products were seen as too complex to be hawked or serviced through digital modes without insurance agents. Insurers will also need to introspect and bring about changes internally, according to PRASAD RAI, vice-president, Global Strategic Clients Group at Oracle, who spoke to Raghu Mohan. Edited excerpts:
How has covid -19 influenced digital transformation in the insurance sector?
It has accelerated digital transformation, and in a matter of days, almost everyone was working remotely. This was an alien concept in the insurance sector. At the same time, there was an avalanche of queries from customers on business interruption policies, change in coverage, and a very heavy possibility of interruption in premium receipts and continuing to pay claims.
The sector has been doing exceptionally well, because insurers were in various stages of digital transformation. The crisis did expose some glitches and chinks, and in the same vein, it manifests the importance of digital technologies. We expect to see insurers leveraging technology to reduce costs, improve data analysis, streamline claims and underwriting, bolster customer service and drive efficiency.
They will transition to digital documents, leverage artificial intelligence (AI), automation, and implement other “bionic” capabilities to help employees make better-informed decisions and focus on higher-value work.
How can insurers not only survive, but thrive in the current environment?
They will need to be both agile and adaptive. Based on our expansive experience of working with the world’s leading financial services and insurance firms, we have listed eight strategies to succeed. These range from taking full advantage of data, enabling a more technology-driven workforce, using AI and machine learning-based advanced analytics throughout the insurance value chain,
harnessing the power and agility of the cloud, modernising financial management, streamlining regulatory compliance, elevating digital customer engagement, and enabling an ecosystem approach to bring the best insurance solutions to market. We have many customers that surpassed market expectations with their delivery.
How can legacy insurance players differentiate and mo der ni se compared to insure-techs and big techs like google or an amazon?
Traditional insurance companies cannot become completely digital overnight. They have years’ worth of data in their legacy systems. However, they can still take small but effective steps in the digital direction, to give fierce competition to the new companies.
The shift to digital distribution channels was forced, but it showed that products were too complex for customers to understand or purchase without the help of traditional agents. In response, insurers will have to either support their agents with enhanced tools for online selling, or simplify the products. Insurers may need to do both. Simpler products are also necessary to support digital business models built on high degrees of straight-through processing.
Traditional insurers will also need to introspect and bring about changes internally. Workforce agility, capacity and scalability are other factors which need to be kept in mind to adjust to shifts in claim volumes and customer service inquiries, for instance, or sudden spikes in demand for new products. Managers must be ready to reallocate resources quickly. With our cloud solution Generali saw a 70 per cent reduction in the time needed to complete a HR transaction and a 30 per cent increase in productivity for product development and testing. The cloud solution has since expanded to encompass other applications to enable the organisation to service their customers in better and more efficient ways.
What is the impact of growing regulation and increasing security threats on insurers?
According to a study by Deloitte, cybersecurity tops the list of priorities for chief information officers in the insurance sector for this year. We all have seen massive security breaches in some of the most reputed brands. Then, there are regulations in place to protect customers, their data and money. Sometimes, rapid and sudden changes in these regulations bring challenges for insurers. Many insurers may choose to significantly increase their investments in cloud-based infrastructure. Previously, questions about security had limited full commitment to the cloud. Now, however, it’s clear that cloud-based environments offer the flexibility, scalability and cost-efficiency that insurers need to sustain remote working at scale.
How is Oracle supporting its insurance clients to respond to changing needs in the experience economy?
Whether you operate in the old world of on-premise technologies, or in the new cloud-based world, your ability to harness the value of your data is key to obtaining competitive advantage. In America, we have collaborated in designing Amelia — an Aibased digital assistant which emulates human behaviour. AI accesses Oracle’s core applications, embedded process flows, and automation assets to deliver a secure and scalable conversation experience. The integration with Oracle provides a consistent experience across all channels that not only delivers faster customer service, but also takes advantage of real-time data from our solutions.