Unfortunately, the world we live in today is full of uncertainty. Perhaps no other event in recent history better demonstrates this reality than the global COVID-19 pandemic, the effects of which have impacted almost every facet of our lives. In times like these, it pays to have something to rely on and often, this is the role that insurance plays. When the unexpected happens, people rely on insurance to help them pick up the pieces and reclaim what is left of their lives.
Given that policyholders often turn to their insurance companies at times of great personal need, it falls to insurers to provide immediate relief with minimal complication. In the past, delivering this level of service was significantly more difficult. Manual reconciliation of personal files and accounts contributed to much of the red tape surrounding insurance claims.
Luckily, today’s modern automated policy administration system has been a major health and life insurance innovation. That being said, those who have yet to update their own systems may be wondering: How has this technology been a benefit to consumers, and can it offer the same advantages to their own clientele?
Easier Claims and Improved Customer Service
Typically, insurers do not offer just a single product or service. Most will offer multiple products, including property insurance, health insurance, or life insurance. To make these products more appealing to potential clients, insurance companies would often bundle these together in exchange for discounts and reduced rates on premiums. Putting together home and automobile insurance, for example, may net a client a rate reduction of five percent on both.
While this may look like an appealing deal to clients, the reality is much less attractive. These different products were often built on top of policy administration systems that were not designed to interact with one another. These homegrown systems would often wall off client information relevant to itself, preventing other business units from accessing it and blinding itself to other operational units as well.
Simply determining whether a client’s account was current would be a nightmare. In order to determine whether a client deserved coverage or not, insurer employees would have to sift through piles of documents to find customer files, then compare those against files from another department.. Meanwhile, clients would have to wait, sometimes for months, for a decision to be made on their claim.
In comparison, today’s modern policy administration systems are almost universally built on a single source of truth. This contains all of a client’s data, including their subscriptions and the account status of each one, agreed-to rates, time spent with the insurer, and other relevant information. Unit members can refer to this central database to see at a glance whether a client’s account is up to date and what level of coverage they are due. This makes claims payouts much simpler and faster, and results in more satisfied clients.
Improved Product Development
Insurers who implement a modern policy administration system frequently report that they suddenly have access to a world of customer data that was once buried in a filing cabinet somewhere. This new wealth of information provides them a solid grounding from which to build their next line of products. The central data foundation that contains all relevant information on their clients can now be used to develop more appealing products for them. This is far preferable to the old model of product development which depended on templates for products that were assumed to be universally appealing.
For example, insurers who are seeking to tap into the millennial generation may want to offer a life insurance product with reduced coverage and a smaller claim, but also with less expensive premiums. Millennials simply do not have as much disposable income as previous generations, but are likely to be productive members of the workforce for longer. In the end, everyone wins: insurers tap into a valued market segment, while millennials get the coverage that they need at an acceptable price.
This also has an internal benefit to insurance firms that leaders would likely appreciate as well. Being able to work from a single source of truth will allow firms to collaborate better and smarter on product development, making them more appealing to clients, but also strengthening a firm’s internal culture at the same time.
Quicker Time to Market
Not only will new products be designed with a centralized, cloud-hosted policy administration system, but product design timelines will also be drastically reduced. This means less back and forth between product specialists, marketing, and frontline agents, all of whom used to be dependent on physical files. Insurers that have implemented modern systems have reported a decrease in time to market of an average of one-third, making their brand new products available to the market sooner.
This has another global effect on the insurance industry as a whole. With insurers releasing newer, more streamlined products faster, consumers are more spoiled for choice than ever before when it comes to choosing the coverage that’s right for them. Does a client need more coverage or a more affordable premium? Are there any other coverage options that they would like to roll into their current plan? With firms having to compete more fiercely than ever to win and retain clients, policy packages with these attractive options are certain to be available at one of them.
It’s not just insurance firms who benefit from embracing the changes that accompany company-wide digital transformation. Well-communicated implementation of modern systems can also lead to many benefits to consumers, who will then value their relationships with their insurers more and stick with them for the long haul.