The insurance industry is a unique community of great people with a strong mission to safeguard and protect what matters most. It’s up to us to put lives back together, restart businesses, rebuild communities, and make new realities – guided by technology. Working together, we can make the change of yesterday an opportunity today for a stronger tomorrow.

As we navigate through the digital future, consider technology that delivers productivity, intelligence, simplicity and value, including:

While 2020 was a year like no other, we can conquer adversity to make our industry better. As the old saying goes, “necessity is the mother of invention.” We saw that ring true following the last global crisis and we see the opportunity today to be even greater. The digital future of insurance brings with it enormous opportunity – whether you’re just getting started on your digital transformation or taking the next steps on your technology roadmap.

The Digital Future of Insurance Is Now

The underlying currency across all steps of the insurance lifecycle is data. By putting data to work at your brokerage, you can gain actionable intelligence. Data analytics takes out the complexity and unnecessary hours spent processing manual reports and is akin to having your own dedicated team of analysts combing through your data every day to identify opportunities and potential challenges with your book of business. In addition to helping you make better, more profitable business decisions, data analytics equips you to fulfil your role as a trusted advisor to your customers. Imagine presenting data-backed benchmarks and recommendations to your customers that help assure them that they are getting the best product at the right price. Leveraging data to create actionable business insights empowers your brokerage to drive greater employee productivity and increase value for all stakeholders in the distribution channel.

Data Analytics

Independent brokers and insurers must be in sync at every stage of the insurance lifecycle to ensure policyholders get the best advice, coverage and service. Broker-insurer connectivity increases ease of doing business across the insurance lifecycle, ultimately saving hours of time and creates more profitable premium opportunities. But making the application and renewal process simpler is only the first step. To make a real impact on your customer experience, the complete end-to-end commercial lines process needs to be digitised – from the policyholder to the broker to insurers and back. The commercial lines value chain is a perfect example of the broken, expensive and frustrating processes that are screaming for a modern digital solution. Fixing this expensive and time-consuming process from start to finish is a game-changer.

Collaborating More Closely with Market Partners

Improving customer experience remains one of the greatest opportunities for insurance brokers. The importance of creating simpler, digital interactions with your customers cannot be overemphasised. Overnight, COVID-19 created a reality where digital interactions changed from a customer expectation to a critical must-have for business survival. Even people among the older generations who never embraced digital interactions started buying groceries online and now expect digital service. With wider acceptance by consumers, digital interactions will be the norm long after the pandemic. According to a recent Oracle study⁶, 77% of consumers feel that inefficient customer service experiences detract from their quality of life. The insurance lifecycle is complex and bewildering for customers so creating simpler customer experiences at each stage can give your brokerage a competitive advantage.

Enhancing the Customer Experience

While the management system in the back office is the nerve centre of your operations, sales and marketing in the front office provide the lifeblood needed for growth. The business of insurance thrives on relationships – knowing the needs of your prospects and customers is crucial. When it comes to prospecting, finding new business can be challenging. In fact, the probability of closing business with a new prospect is low, averaging between 5-20%.⁴ On the other hand, the probability of selling a new product to an existing customer is much better, at 60-70%.⁵ Given that the most important determiner of your book of business’s health is renewals, it is important to maximise the renewal as an opportunity to serve more of your customers’ needs. Fortunately, there are digital tools that will help you retain more business and gain more share of wallet with your current customers, plus equip you to increase your win rate with new customers.

Extending Automation to the Front Office

Your management system is the centre of your operations and should have capabilities that allow you to work more efficiently, communicate better with your customers and your insurer partners, and grow your business more profitably today and well into the future. Your core technology needs to be defined by these three principles: openness, velocity and user experience.

Creating More Flexibility at the Core

For brokerages, the time is now to take the necessary steps towards becoming a digital broker. Adapting your business to the new norm requires technology to optimise your operations and provide an exceptional customer experience.

Becoming a More Productive, Intelligent, Simple and Valuable Business

William S. Burroughs

When you stop growing, you start dying.

“

Today’s winning brokerage must offer the digital experiences its customers are accustomed to, or else it risks losing that business to another that has invested to create simpler, more convenient experiences. Technology can lower your overall cost of growing and operating your company, making your business more profitable and valuable – and the numbers prove this in big ways. Data shows that digital brokerages generate 156% higher revenue per employee compared to brokerage that are not digital.² Another recent study from McKinsey that examined the opportunity for technology-driven productivity within the insurer side of the ecosystem echoes this research, showing that the benefits of adopting modern technology include a 40% reduction in IT costs, a 40% increase in productivity, more accurate claims handling, increased profitability and reduced churn.³ Clearly, technology investment, when done wisely, creates strong returns.

Build more resilience and value into your business

Equip employees with the tools they need to work more intelligently and productively

Build stronger bonds with your customers

In this new reality, how do you accelerate your journey to a fully digital future? How can you use the COVID-19 crisis to become a more resilient brokerage and emerge as a stronger, more valuable business? While most of us would like to delete 2020 and move on, why not reframe it as the year you finally got serious about the digital changes you need to make? By investing in your digital future now, you’ll:

The Road to Change

In 2020, within a matter of months, companies accelerated their digitisation strategies in what would have taken years pre-pandemic. According to a new McKinsey survey, “responses to COVID-19 sped up the adoption of digital technologies by several years – and that many of these changes could be here for the long haul.”¹ Microsoft CEO Satya Nadella confirmed this sentiment. At one of the company’s quarterly earnings calls, he shared that Microsoft saw “two years’ worth of digital transformation in two months.” Virtually turning on a six-pense, the majority of companies were able to get temporary solutions in place to address new demands presented by the pandemic such as providing remote work options for staff and online service capabilities to policyholders. McKinsey survey respondents consisting of C-level executives and senior managers reported speeding up the digitisation of their customer interactions and core internal operations by three to four years. Unsurprisingly, many survey respondents believe the technology-related changes they’ve made will be long-lasting and have increased their funding of digital initiatives. McKinsey found that “for most [companies], the need to work and interact with customers remotely required investments in data security and an accelerated migration to the cloud. Now that the investments have been made, these companies have permanently removed some of the pre-crisis bottlenecks to virtual interactions.” Compared to pre-crisis norms and practices, respondents said the two most cost-effective changes they made were remote working and cloud migration. When asked about changes that positioned their companies better than before the pandemic, respondents cited investments in data security and artificial intelligence. Most notably, the survey found that executives at companies who experimented and/or invested more capital into digital technologies during the pandemic were “twice as likely to report outsize revenue growth than executives at other companies.” Like so many other industries, insurance is at a technology turning point. And there’s no turning back. It’s time to change and embrace technology fully to make your brokerage more productive, simple, intelligent and valuable.

Pushing Past a Technology Turning Point

To navigate forward, there are lessons from the near past that can help guide us. In 2008, we saw the start of the Great Recession triggered by a global financial crisis. Global GDP went from 4.3% in 2007 to -1.6% in 2009. The insurance industry on the other hand only saw a 6% decrease in global gross written premium. Similarly, while global unemployment climbed to 10%, in the insurance industry it was lower, at around 7%. This illustrates that, while our industry is not immune from economic shocks, the insurance ecosystem is incredibly resilient. While none of us would ever wish for a global pandemic and economic upheaval, there are positive aspects that come out of them. During the 2008 Great Recession, companies had to find new, lower cost ways to run their businesses. As a result, the world saw the birth of cloud computing. The old way of doing IT was expensive, rigid and slow-paced. What the economic crisis did was spur demand for a new way to access computing power. This paved the way for Rackspace, Amazon, Microsoft, Google and others to pioneer novel and less expensive ways for companies to digitise and quickly scale their businesses in the cloud. Cloud computing unleashed unprecedented innovation, creating new business models and reinventing old ones. Millions of jobs were created and unemployment quickly declined to less than 4%. Productivity gains increased significantly as people learned to use technology to do more in less time. Shares of leading cloud companies became more valuable, driving a record bull market. Ultimately, cloud computing – and the cloud platforms we rely on today – brought the power of at-scale R&D investment to independent small businesses that couldn’t do it on their own at an affordable price. Out of the initial fear and economic devastation that started in 2008 came world-changing innovation and digitisation that made businesses more:

Looking Back to Look Forward

In the current climate, the strategies that worked yesterday may not work best today or in the future. Faced with this uncertainty, it is time to adjust the sails. As an industry, we can make positive progress together fueled by innovation. Digital technology is lighting the path forward – whether that’s pushing the digital transformation envelope or taking the next steps in advancing digital strategies more broadly to create new digital experiences for both staff and customers.

Is Now

The Digital Future of Insurance

Simple:

Intelligent:

Productive:

Valuable:

Intelligence that helps you grow your business more efficiently by turning data into actionable insights

Connectivity across the insurance ecosystem that empowers brokers and insurers to perform better together

Simple, end-to-end digital interactions with your customers – from application and policy binding, to servicing and renewals

Integrated automation across all broker roles, from the back office to the front office

Growing more profitably by meeting more of your customers’ needs.

Knowing customers better, simplifying the customer experience.

Capturing the power of data to compete more skillfully.

Lowering the cost to produce, market, distribute and sell.

Source

McKinsey Global Survey of Executives, July, 2020.

Applied Digital Broker Annual Report, Applied Systems, 2020.

Source

, McKinsey, 2017.

Source

, Pearson Business Analytics, October 1, 2020.

Source

, 2018.

Source

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The days of closed systems are coming to an end, and your technology must become more open and “integratable”, creating flexibility for you to harness its power to support your business as it evolves and changes over time. Software built on component-based architecture with open APIs creates simple ways to integrate your management system with other critical business applications, and quickly gets information in and out of the system of record. Technology must work for you, allowing your business processes and workflows to change at the increasing pace of innovation happening in our industry.

Openness:

One of the most beneficial outcomes of using open and modular components is velocity. When your technology solutions are built on flexible API-based architecture, more frequent real-time updates can be made to your core software versus an annual or semi-annual update. This means new capabilities focused on specific roles or functions within your brokerage are released faster and are less disruptive to your business while creating incremental value.

Velocity:

Among the many reasons people love the brand Apple so much is because they make products that are extremely intuitive and easy to use. Apple’s mantra was simplicity, and fervently preached by Steve Jobs, “Let’s make it simple. Really simple.” In addition to Apple, companies like Amazon, Uber, Airbnb and others have redefined user experience (UX) and the bar is high. No business should be bogged down by software that’s complicated and frustrating to use. The UX of your brokerage software should be simpler, with fewer screens and clicks, and should eliminate redundant data entry. A clean, elegant interface across all devices improves productivity, simplifies training and on-boarding of new team members, and overall creates happier employees.

User Experience:

We cannot direct the wind, but we can adjust the sails.

“

Pope John Paul II

The future starts today, not tomorrow.

“

Confucius

Study the past if you would define the future.

“

Socrates

The secret of change is to focus all of your energy, not on fighting the old, but on building the new.

“

Fred Rogers

Often when you think you're at the end of something, you're at the beginning of something else.

“

As your brokerage becomes more sophisticated in how it sells and markets insurance, consider new technology designed specifically to manage prospecting, pipeline and renewals. Connecting your management system with CRM technologies like Salesforce provides a 360-degree customer view, eliminates duplicate data entry and the need to switch between two different systems that don’t talk to each other. The result? Underwriters and brokers are empowered to work together seamlessly to sell, renew, cross sell and service your brokerages’ customers.

Customer Relationship Management (CRM):

Today’s consumers are inundated with information from every direction, making the ability to cut through that noise a vital necessity. You can do just that by using sophisticated marketing automation technology married with world-class content resources to reach the right audience at the right time with the right message. Marketing automation allows you to build and track marketing campaigns that deliver relevant and timely content to both P&C and Benefits customers and prospects. Through more targeted campaigns and content, you can elevate your role as a trusted advisor while growing your book of business.

Marketing Automation:

While online customer service options used to be a nice to have, COVID-19 thrust them into the “must have” category to manage business operations and provide your customers the simple connectivity with your business they not only expect, but need. Self-service technology enables an enhanced customer experience by giving customers the freedom to access insurance information, documents and online bill payments on demand. It provides a single broker-branded portal and mobile app experience for policyholders to interact with; strengthens the broker/customer relationship; and saves money by shifting transactions historically provided by brokerage employees to self-service. Because of these efficiency gains, customer self-service often delivers a return on investment in less than one year.

Online Customer Self-Service:

Simplifying the application and renewal process is a significant opportunity to deliver true value. Providing a QuickBooks-like experience for insurance applications allows you to eliminate the unruly back and forth exchanges of emails containing complex forms that frustrate your prospects and customers, not to mention all the work and cost put in by your staff during the renewal or new application process. Removing the inefficiencies from one of the most time-consuming and critical parts of the insurance value chain benefits your brokerage in many ways. These include increased productivity since brokers will spend less time and effort processing applications and renewals; reduced E&O exposure by automatically capturing accurate risk data directly from customers; and heightened customer satisfaction by making it easier and faster for customers to apply for and renew insurance.

Applications and Renewals:

Once a risk is submitted and the policy is quoted and bound, the opportunity for time-saving automation doesn’t stop there. Servicing, policy documents, managing claims details – all that information exchange needs to be automated. With the right technology, you can effectively “go paperless” by digitally exchanging information and downloading data and documents directly from insurer partners into your management system. And it can be instantaneous via real-time download. Using download, your agency can save 60 minutes per employee per day, which leaves a lot of minutes for you to reclaim. By increasing connectivity, you and your insurer partners can collaborate more effectively to provide the best products at the best price for the end policyholder.

Policy Servicing:

The submission process should begin right in your daily workflow to give you a seamless and simpler way to prepare for marketing and completing the application or renewal. Within in that same workflow, you should be able to instantly search appetite so you have a clear view of which insurer partners most desire a particular risk. From there, you should be able to submit the risk directly to insurers’ policy admin systems so they can begin the quoting process more quickly. Automating the process end-to-end gets rid of all the emails, multiple insurer portals, and paper exchanges that today make this whole process so time-consuming, expensive, and maddening for you and your customers.

Submission Management:

Cora L. V. Hatch? Jimmy Dean? Dolly Parton?

The Digital Future of Insurance Is Now

Becoming a More Productive, Intelligent, Simple and Valuable Business

The Road to Change

Pushing Past a Technology Turning Point

Looking Back to Look Forward

Introduction

Table of Contents:

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⤓ eBook (PDF)

While there’s much debate as to who actually uttered those words of wisdom (we like to think it was Dolly Parton), there isn’t any debate that the events of 2020 changed the way companies in every industry do business. Virtually overnight, the wind shifted in an unprecedented direction, challenging businesses large, small, and everything in between to re-evaluate their ways of doing things and their paths forward.

Downloads

In the current climate, the strategies that worked yesterday may not work today or in the future. Faced with this uncertainty, it is time to adjust the sails. As an industry, we can make positive progress together fueled by innovation. Digital technology is lighting the path forward – whether that’s pushing the digital transformation envelope or taking the next steps in advancing digital strategies more broadly to create new digital experiences for both employees and customers.

Digital disruption in insurance: Cutting through the noise

Marketing Metrics

Farris, Paul W., Neil Bendle, Phillip Pfeifer, David Reibstein.

Consumers: Creating Digital Customer Engagement

The Oracle Communications Survey

, Modern Experiences for Connected

Source

, Pearson Business Analytics,

October 1, 2020.

Marketing Metrics

Farris, Paul W., Neil Bendle, Phillip Pfeifer, David Reibstein.

Source

, Pearson Business Analytics, October 1, 2020.

Marketing Metrics

Farris, Paul W., Neil Bendle, Phillip Pfeifer, David Reibstein.

, Pearson Business Analytics,

October 1, 2020.

Marketing Metrics

Farris, Paul W., Neil Bendle, Phillip Pfeifer, David Reibstein.