These digital channels are only effective when the backend is digitized, which requires digitization of operations. IOA provides the guidance to build a roadmap that will enable visionary companies to become fully digital insurers. The move is meant to account for the fact that Autopilot makes Tesla cars much safer than traditional ones on the road today. Advances in artificial intelligence and the Internet of Things (IoT) have opened up new markets and new opportunities. 1. Digital engagement applies to new business through digital marketing, online customer journeys, digital underwriting and binding, as well as policy administration and claims through self-service. © 2021 ExlService Holdings, Inc. and Affiliates. The future of the insurance industry lies in the adoption of a well thought-out strategy to implement RPA, blockchain and machine learning. The biggest strategic advantage, however, is a significant paradigm shift for a 350-year-old industry: Change the assumption behind the current insurance business model from that of a service that mitigates the monetary consequences of an event (a largely financial, reactive response) to a more preventative, proactive service that uses data and experience to try to prevent loss in the first place. However, the long-term viability of insurers requires a more comprehensive, integrated response that allows for short- to medium-term recovery, as well as a digitally driven strategy to thrive in the long haul. Digital Disruption Is Reshaping The Insurance Sector Goutam Dutta, Chief Information and Digital Officer, Bajaj Allianz Life Insurance in conversation with Himali Patel Himali Patel - 19 August 2019 For more than 350 years, insurance as an industry has faced challenges to its existence from catastrophic loss, societal change and the need to innovate, all of which have presented themselves over time, but which the industry has (largely) taken in its stride, survived and often thrived from. Recorded Dec 16 2020 61 mins The pandemic has affected businesses worldwide, forcing enterprises to change the way they operate. This also allows for tremendous speed in decision making and provides a more accurate and personalized offering to the customer. — Andrew Rose, CEO of US insurance comparison website Compare.com. IOA enables the creation of a phased design that can improve user experiences for employees, customers and partners by integrating workflows and data streams, and enhancing performance and security throughout the ecosystem. The adoption of flexible cloud infrastructure, including hybrid deployments as needed for integration and security, along with a strategic plan to incorporate vital, new Insurtech services, is imperative. This enables insurers to grow their business rapidly and develop new propositions, with our platform as a key differentiator. At Equinix, we have seen numerous examples of financial services companies substantially increasing their secure communications bandwidth capacity by leveraging private interconnection to join themselves and their partner ecosystems together. Accenture goes on to explain that “if insurers fail to create their own ecosystems, they run the risk of being limited to the role of a pure risk cover provider. Insurance adjusters then use the data to more accurately link premiums to fleet performance and driver behaviour. Examples of some of these are Next Insurance, Embroker, Coverwallet, Trym Friendinsurance has created a peer-to-peer insurance model which is connecting groups of customers and facilitating a yearly cashback when they and their connections remain claims-free. An overview of the digital transformation challenges and overall evolutions in the insurance landscape. Digital trends are dissolving the traditional boundaries and the long-held competitive advantages of insurance companies. To stay competitive in the medium to long term, traditional insurers will need to reinvent themselves with digital at their core. Digital data flows help insurers manage their customers as individuals rather than groups – an expectation of today’s digital customers. In the last few years, #InsurTech has increasingly proved to be a disruptive influence in the insurance sector, an industry which can be considered as one of the most complex in the world. Visit an EXL lab to find out how analytics, artificial intelligence, robotics, machine learning and other innovative technologies are creating breakthrough results. It’s a matter of when, exactly how and not if, digital disruption will change the traditional model of insurance. The expression digital disruption has been coined to describe this most recent movement. Risks arising from cyber security will fuel the need for risk coverage from corporations and individuals. The bottom line is that technology must become a strategic enabler of the business. Digital revolution has disrupted business practices across India and the insurance industry has been no exception. The insurance industry is at the cusp of Disruption and the current pandemic has further escalated the vulnerabilities in the traditional business model. Beyond these societal pressures, insurance is now facing forces that are driving a need for continuous technical innovation to address unique and unprecedented disruption, which create multiple, previously unimaginable barriers to sustainability in the industry’s long history. Digital disruption in the insurance sector and business in general allows companies to sail on three different dimensions to explore their business model by experimenting and improving their product, customer service and reduction in cost. Telematics will be useful for drivers in this regard. Digital disruption in health insurance in 2020 There is no doubt the insurance industry is changing at pace. Other financial services industries like banks have taken the lead in redefining customer engagement using digital with reduced friction, cost and more importantly catering to the millennial population. For the next phase, insurers must be certain that their current systems – legacy or otherwise – are effectively integrated so they can defend their brand and customer base, while adapting products, services and workflows to address the needs of the “new normal” situation. Example EXL’s Claims FNOL automation was developed leveraging our suite of in-house and partner automation solutions enabling automated workflow, intelligent extraction of information from multiple input sources, judgment based processing and cognition embedded decision making for transforming client’s end-to-end claims process. I recently wrote about the disruption the insurance industry faced in the late 1990s and early 2000s as the internet became an increasingly regular part of business. Telematics, home sensors, drone surveys and other innovations can provide insurers with critical data they can leverage using analytics to help make better decision in areas including underwriting, pricing and claims adjudication. We believe these disruptions are real opportunities to radically evolve the traditional pillars of insurance and leap into the future. Disruption in the insurance industry. Insurers of the future will play more of a risk avoidance role and less of a risk mitigation one. Adoption of digital payment mode by various banks, initiatives taken by the central government of India and insurance regulatory agencies such as IRDA has formulated and taken a few steps to combat with the prevailing situation. Digital disruption, a key phenomenon concurrent in many industries of this day and age, has made its way into the insurance industry as well. Five Levels of Digital Disruption in Insurance Digital trends are dissolving the traditional boundaries and the long-held competitive advantages of insurance companies. Example A host of direct-to-consumer digital insurance brokers or companies (MGAs) are entering the market with the intent of disintermediating existing channels and delivering instant policies to small commercial insureds. Photo Courtesy of Pexels. Example Fueled by telematics, usage-based insurance (UBI) and pay-as-you-drive (PAYD) programs will continue to evolve. What the insurance industry must also face is that the emerging digital economy in risk transfer will create a set of accelerating forces that will continue to evolve. Executive Vice President and Head of Insurance, EXL, Vice President and Global Lead, Digital EXLerator Framework, EXL, Vice President, Digital Lead Insurance, EXL, Banking, Wealth Management & Credit Cards, Five Levels of Digital Disruption in Insurance. Big Data. This paradigm shift must be addressed by a new kind of collaboration between the insurance industry and its technology partners. That is changing, but in ways incumbents should embrace. A simplistic (perhaps too simplistic but fundamentally correct) way of describing an insurance carrier is being an intermediary between risk-cover seekers and those with capital to deploy. Importantly, this paradigm shift presents the opportunity to alter the perception and value proposition of what insurance does—and means. From a technical standpoint, how can all of this be achieved? How can technology help insurance overcome this latest barrier to a sustainable existence? IOA gives companies a competitive edge as they face these turbulent forces, by creating a framework to remediate legacy constraints while setting the stage for the company to disrupt instead of being disrupted. Learn to revamp your policy collaboration in a rapidly changing, omni-channel environment while providing new types of digital insurance. Automation can reduce the cost of a claims journey by as much as 30% — McKinsey, A large incumbent could more than double profits over five years by digitizing existing business — McKinsey. This is why 81% of insurers are familiar with blockchain, expecting widespread adoption through the industry, and 100% are planning on integrating it into their production systems by 2021. The intermediary is an aggregator, algorithm and customer engagement model. Over time, digital technologies like connected homes, sensors, and driverless cars will reduce human error and provide better responses to hazards, improving safety. Pillars of the insurance industry such as underwriting, risk management, expense control and product distribution are being disrupted. We believe there are five levels of disruption that will affect the insurance market and force insurance carriers to redesign their business models: Automation has driven process efficiencies for many years. The expression digital disruption has been coined to describe this most recent movement. To understand how IOA can help you achieve success in the current era, check out the insurance blueprint. The continuous application of integrated business and technology design decisions is critical to thriving in this new disruptive environment. Insurance has always relied on data to make decisions. This type of disruption changes the way business is done. Beyond these societal pressures, insurance is now facing forces that are driving a need for continuous technical innovation to address unique and unprecedented disruption, which create multiple, previously unimaginable barriers to sustainability in the industry’s long history. In particular, the highest level of disruption was reported in the areas of products, services and customer service - all crucial aspects of the insurance value chain. Insurance disrupted focuses on nine applications of digital technology that could have the greatest potential to disrupt general insurance over the next ten years. Digital Disruption of Life Insurance 1. A fit-for-future insurance company will need to implement the disruptions in the market and proactively change their business model to remain profitable. Disruption in the insurance industry Disruption has been occurring at pace in different forms in insurance. Digital is disrupting many facets of health insurance. Tesla argue that insurance premiums should be adjusted to account for its cars being safer - the National Highway Traffic Administration found that crash rates for Tesla vehicles have plummeted 40% since Autopilot was first installed in 2015. Digital is seen as a means for not just upselling insurance to existing clients but to also to acquire new clients and for providing better and more enhanced customer service to existing customers. The insurance sector is more prone to digital disruption than any other financial service companies. Example EXL’s LifePRO® digital suite supports direct-to-customer life insurance operations to provide an innovative digital customer journey and automated underwriting solution that disrupts many of the conventional ideas on purchasing and servicing life insurance. Digital Disruption In Insurance: The Rise Of InsurTech. How much personal protection life insurance will be sold online 5 years from now? Yet today the industry faces the effects of the COVID-19 pandemic, which has created stresses and opportunities not seen before. Insurance models that speak to the true cost of an event, those that incorporate real-time collaboration (e.g., with engineers and climatologists), allows insurers to not only protect their own business models, but also become trusted advisors for those they insure. If the insurance industry is to remain an important service to customers, then the reality and adoption of digital is critical, said Johannes-Tobias Lorenz, a senior partner in McKinsey’s insurance practice and one of the lead authors of the report, “Digital Disruption in Insurance… How Companies are Recovering Millions in Revenue and Delivering a Competitive Customer Experience For now, secure communications to and from office systems alongside the deployment of collaboration tools will keep companies operating and serving their customers and partners. It has become table stakes for any company that wishes to thrive and remain relevant. Digital disruption in insurance: Cutting through the noise Digital insurance in 2018: Driving real impact with digital and analytics Highlights from articles this year show the progress that has been made in reinventing the insurance landscape—and suggest more disruption to come.

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