The pace of change in the insurance industry is more rapid than in most, and is impacted by the new business models, customer behaviors, distribution mechanisms and new technologies. Insurers are constantly revising the way they function, as they strive to stay one step ahead of their competition, through ongoing strategic re-evaluation and re-orientation.
- Insurers today find that their customers are quite accustomed to online retail shopping and expect the same levels of convenient digital distribution and seamless, tailored experience from insurers, across their devices, including tablets and mobiles. This is causing a shift in insurance value models and preventative risk management.
- Insurers today are taking advantage of the ‘Internet of Things’ to use sensors and other digital intelligence to partner with their customers on health and well-being to caring for vehicles, home and commercial equipment.
- Insurers target new customers differently and engage with them relevantly to distribute tailored products through direct digital sales, apply new customized approaches to underwriting and financial advice.
- Big data and predictive analytics are also disrupting the way insurers plan their business and anticipate customer requirements.
As they struggle to reap the promise of commercial possibilities, insurers are also seeing a lot of disruption being caused by DevOps, Cloud and Agile practices in the use of technology in their operations. Let’s look at what they are and understand their sphere of influence on the industry and see how they fit in with the emerging practices in the insurance industry and the expectations of its customers.
DevOps:
In an increasingly service-oriented world, DevOps takes a cross-disciplinary approach to building resilient systems in an ever-evolving world of operations, which require rapid changes to production support. DevOps requires the operations staff to use many of the techniques used by developers, similar to how they approach source control to testing in an Agile development process. DevOps extends Agile principles beyond the boundaries of “the code” to include the entire delivered service and translates to continuous integration and continuous deployment. DevOps is about creating a culture of collaboration, performance, availability and pace of change, across the various teams, which makes it extremely useful to the insurance industry as it vies to offer new insurance models tailored to the needs of their customers with increased speed-to-market. New age policy administration systems are making it possible for insurers to develop new products even as DevOps enables them to ensure that the policy administration system provides the required support, with automated processes and functioning which ensure continuous delivery.
Cloud:
Cloud offers a coveted opportunity for a much-needed digital transformation for the insurance industry. This unlocks a number of opportunities which include the ability to deploy new solutions quickly and the invigoration of existing systems and processes through digitization. New solutions could enhance the value of existing offerings or meet the expectations of customers by designing entirely new offerings, which take advantage of the Internet of Things to offer speed-to-market and better service delivery. Cloud enables insurers to unlock the business value offered by data analysis, to access predictive analysis and insights from any internet-enabled device. These, along with real-time, on-demand reports provide strategic inputs and business direction to the decision-makers. Insurers also transcend the limitations set on their capabilities by their on-premise servers, to enjoy faster integration speeds, flexibility in customizations which link policies to existing offerings. This online environment also helps businesses to upgrade to new technologies seamlessly even as they reduce the maintenance and support costs associated with policy administration. Insurers enjoy a single view of their clients to derive more insights than before about them, and can devote the time they save on managing administrative tasks to planning better business initiatives. Service becomes faster to meet customer expectations and regulatory compliance also improves significantly, compared to the previous levels.
Agile:
In a digitized environment where insurers, brokers, underwriters and claims adjusters all get to have the same view of the client and enjoy the ability to complete their administrative and clerical tasks faster than ever, the workflows are turning agile in response to customer demands and reacting more quickly to external market forces. Even as insurers who are shackled to their legacy systems are mired in the inflexible processes around them which refuse to scale, progressive insurers are making this transition to enjoy the freedom offered by the new generation of agile IT systems. Many of these systems are accessible and affordable, and allow an insurer to adapt appropriately to a changing environment. Agile policy administration systems enable an insurer to improve their day-to-day performance and business processes, add new products and services to their existing offerings even as they derive strategic insights which make it possible to do so. Agile technology ensures that the implementation is done quickly and the support and maintenance to this Software-as-a-Service product are provided in an ongoing manner, without the need for an internal IT team. Such agility and flexibility are the stuff of dreams for insurers imprisoned by legacy systems.
The combination of DevOps, Cloud and Agile make some insurers highly responsive and ready to face the demands of the dynamically changing industry imperatives around it, making survival impossible for those who fail to adapt and reengineer the way they work; disrupting the insurance industry and the way it operates.
