Much Ado about Ev­ery­thing

Digital Insurance - - STRATEGIES - Jerry Whet­nall Vice Pres­i­dent, Prod­uct Strat­egy StoneRiver, Inc.

Much is said and writ­ten about the dig­i­tal trans­for­ma­tion of in­sur­ance, and there are many, of­ten vary­ing in­ter­pre­ta­tions of the def­i­ni­tion. A to­tal dig­i­tal trans­for­ma­tion must take into ac­count mul­ti­ple tech­nolo­gies in­clud­ing, but not lim­ited to:

• Por­tals for dis­tri­bu­tion chan­nel com­mu­ni­ca­tion and align­ment

• Por­tals for con­sumer and so­cial engagement

• Il­lus­tra­tions and quote func­tion­al­ity with vary­ing user ex­pe­ri­ences to ac­com­mo­date con­sumers and dis­trib­u­tors alike

Elec­tronic ap­pli­ca­tions with per­sonas for con­sumers, agents, and sup­ple­men­tal ben­e­fit self-en­roll­ment

Au­to­mated un­der­writ­ing for fast, ac­cu­rate, con­sis­tent and re­peat­able as­sess­ment of risk

Pol­icy Ad­min­is­tra­tion Sys­tems (PAS) ca­pa­ble of man­ag­ing all as­pects of the pol­icy life­cy­cle and—just as im­por­tant—able to rapidly de­fine and bring new prod­ucts to mar­ket

Busi­ness In­tel­li­gence as an over­ar­ch­ing tool to mine, an­a­lyze and present ac­tion­able data

Dig­i­tal in­fra­struc­ture – as Bill Gates said – to make tech­nol­ogy ac­ces­si­ble to Every­one, Any­time, Any­where

Cur­rently we are de­tect­ing a shift in the mar­ket place back to best of suite ver­sus best of breed. Part of the driv­ing force be­hind this swing is the re­al­iza­tion of outof-the-box func­tion­al­ity and pre-in­te­gra­tion ver­sus large ex­pen­di­tures and long time frames to in­te­grate dis­parate sys­tems, tech­nol­ogy and ven­dors. Pur­chas­ing a best of suite, com­plete in­sur­ance plat­form from a sin­gle ven­dor will re­duce li­cense ac­qui­si­tion and im­ple­men­ta­tion costs and time­line, which in turn will in­crease the re­turn on in­vest­ment and re­duce over­all to­tal cost of own­er­ship.

Be­yond the ini­tial ac­qui­si­tion and im­ple­men­ta­tion, the long-term ben­e­fits and real ROI of a dig­i­tal trans­for­ma­tion lie in the ef­fec­tive­ness and ef­fi­cien­cies gained over cur­rent pro­cesses.


As a sim­ple ex­am­ple, con­sider sim­ple com­mod­ity prod­ucts like Term, Crit­i­cal Ill­ness and Pre-need. A com­plete dig­i­tal plat­form would al­low a con­sumer to con­sider and com­pare these prod­ucts, get a pre­mium quote and ap­ply for the cov­er­age. In the back­ground the au­to­mated un­der­writ­ing sys­tem col­lects ev­i­dence and pro­vides a de­ci­sion in moments. The con­sumer then ac­cepts the case, and the Un­der­writ­ing Sys­tem au­to­mat­i­cally in­ter­faces to the Pol­icy Ad­min­is­tra­tion Sys­tem to place the case in­force and de­liver the ac­tual pol­icy to the con­sumer im­me­di­ately. In other words, it is a seam­less, com­pletely au­to­mated, dig­i­tally en­abled trans­ac­tion ex­acted with­out car­rier man­ual ac­tions. Note that the un­der­writ­ing sys­tem is the crit­i­cal com­po­nent in this process. Not only does it as­sess the risk based on the ap­pli­ca­tion re­sponses and col­lected ev­i­dence but it also in­ter­faces to the Pol­icy Ad­min­is­tra­tion Sys­tem to:

• De­ter­mine the car­rier’s to­tal net amount at risk on the per­son as op­posed to just the cur­rent iso­lated ap­pli­ca­tion in hand.

Act in au­to­mated con­cert so to­tal cov­er­age re­ten­tion can be as­sessed. While rein­sur­ance is typ­i­cally best man­aged in the Pol­icy Ad­min­is­tra­tion Sys­tem, an in­te­grated Un­der­writ­ing (UW)/PAS so­lu­tion will more ac­cu­rately de­pict and man­age rein­sur­ance re­quire­ments – re­ten­tion, ceded, treaty or fac­ul­ta­tive. To­gether the UW/PAS can even au­to­mate the rein­sur­ance place­ment process.

Col­lect and book the ini­tial pre­mium and set up the repet­i­tive col­lec­tion method if the car­rier ac­cepts pay­ment cards for ini­tial pre­mium and has the com­bi­na­tion of elec­tronic ap­pli­ca­tion, un­der­writ­ing and PAS.

While a small per­cent­age of car­ri­ers are do­ing this to­day, how is the over­all mar­ket par­tic­i­pat­ing? What are the real car­rier per­cep­tions and ac­cep­tance of the avail­able prod­ucts to en­able a dig­i­tal trans­for­ma­tion, and what is their will­ing­ness and in­tent to act?

In a July 2017 sur­vey, The Dig­i­tal In­surer found that “three quar­ters of the re­spon­dents think that we are just at the start of a lengthy pe­riod of in­creas­ing in­vest­ment across the sec­tor.”

• 74.4 per­cent of the re­spon­dents thought that way.

• 14 per cent voted “Steady as she goes – cur­rent lev­els of ac­tiv­ity likely to be main­tained for the fore­see­able fu­ture”;

11.6 per cent voted “In a hype-bub­ble which will soon burst – both vol­ume and value of deals.”

If 74 per­cent of re­spon­dents agree that ex­pen­di­tures in this area will in­crease and another 14 per­cent be­lieve that cur­rent spend­ing lev­els will con­tinue, that in­di­cates a re­al­iza­tion that a com­plete Dig­i­tal Plat­form will be ta­ble stakes just to play in the game.

The tech­nol­ogy for a com­plete dig­i­tal trans­for­ma­tion ex­ists. These prod­ucts are in pro­duc­tion at car­ri­ers to­day. Select­ing a prod­uct suite that con­tains all the com­po­nents would ap­pear to ful­fill the vi­sion from sev­eral years ago for an ”in­sur­ance com­pany in a box.”

To para­phrase Verges in Much Ado About Noth­ing, when we are mak­ing Much Ado About Ev­ery­thing we must do it – “And we must do it wisely.” What Verges didn’t say but should have was “Act now.”

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