Times are changing for the Insurance industry, and it is more important than ever for Insurers to embrace technology to overcome common issues and remain competitive.

We’ve delved into the key issues facing the Insurance industry and how digital transformation can offer robust solutions through Microsoft technology.

Emerging competition

Many Insurance firms find themselves bogged down with siloed, legacy systems that stunt their ability to adapt and react to digital evolvements. This means that Insurance provider start-ups, who are using Insurtech from the get-go, are disrupting the industry through technical innovation and modelling risk in new ways.

To remain competitive, Insurance firms should embrace digital transformation as part of their strategy. Data, automation and AI can streamline processes to simplify broker management, quicken the claims process and enable insight-led engagement. This improves the customer experience and empowers employees to use Insurtech to create positive business change. For example, AI can be leveraged to give computer-generated advice regarding Insurance policies, and machine learning can precisely price and analyse risk.

Furthermore, Insurers are seeking the ability to unify data from across disparate systems. A holistic view of data to enable a better understanding of the journey from underwriting to policy admin to claims is more important than ever.

Legacy systems

Legacy systems are at the core of Insurance firms falling behind the competition. To move with the times and embrace better customer-centricity, Insurance firms should transfer paper-based information into digital format and innovate their core insurance systems.

Cloud migration should be leveraged by Insurers to use real-time data to create usage and behaviour-based offerings to strengthen their position in the market. Although the main reason for slow migration to the cloud in Insurance is security and regulatory concerns, modern cloud computing is more secure, cost-effective, and market-responsive than on-premises servers. Azure is a cutting-edge platform that provides cloud infrastructure based on Windows and Linux, offering platform-as-a-service (PaaS) capabilities. To assess risk and compliance, Azure has the following resources:

• Audit reports: Microsoft carries out extensive self and third-party audits of the implementation and effectiveness of security, compliance and privacy controls.
• Compliance Manager: Provides a dashboard to allow Insurers to manage compliance activities. This combines risk assessment capabilities, access to a compliance score to understand compliance performance, and recommendations on how to improve data protection and address control gaps.
• Penetration testing and vulnerability assessments are regularly conducted by Microsoft, and any issues that arise are resolved as part of the test.

Additionally, Power Automate, powered by Power Platform, allows users to build automation workflows to streamline processes. In an Insurance context, this means more efficient underwriting and claims processes, saving the organisation time and increasing customer satisfaction. Furthermore, Power BI’s analytics tools can be used to analyse data and share insights. This helps Insurers make better-informed decisions using real-time data and analytics since Power BI is powered by Azure.

Technical debt

Another key issue facing Insurers is technical debt. This means that shortcuts were chosen in the past (often to meet tight deadlines) rather than using best practices to produce higher-quality work, creating issues in the long term. For example, when developers create code quickly to meet deadlines, they may copy existing code rather than refactor a method to include the new functionality.  This shortcut means that there is inadequate testing carried out, and now two sets of code exist. In the future, this creates more code to modify. Customisations with subpar coding mean that the future cost of maintaining, fixing and upgrading these systems builds up.

The Insurance sector has been referred to as a ‘tech laggard’, meaning it is slow to adopt digital transformation and when it does, it is to solve isolated problems. Therefore, technical debt can emerge through quick-fix, siloed technologies that cannot be easily integrated or upgraded. This can severely hinder Insurance firms when competition from Insurtech start-ups is rampant.

Instead of spending capital on maintaining inefficient machines, with inefficient code, Insurers should invest in innovation. Telefónica Tech is committed to an innovation-led development strategy rather than solely requirement-led, to understand clients’ goals and strategies to ensure that the system being developed aligns. This means that systems are futureproofed to support ongoing development.

By upgrading to a low-code/no-code development platform like Microsoft Power Apps, organisations can extend or customise apps that they already use. This solution, powered by Power Platform, requires no developer experience to build organisation-specific apps, where the low-code/no-code aspect makes it easy to update. Using this solution helps Insurers to enter a futureproof IT landscape, where the shortcuts of past developers cannot hinder future systems.

Shifting customer expectations

In a digital, ‘always on’ world, it is vital that Insurers can meet their customers’ expectations. The next generation of Insurance customers are digital natives and expect quick, zero-hassle online and in-person experiences. This means that a digital-first approach must become imperative for Insurance firms to continue to thrive in the future.

For example, customers are seeking real-time responses to any queries they may have. Power Virtual Agents provides organisations with self-service chatbots that can be populated with any FAQs. By integrating with Dynamics 365 Customer Service, a seamless customer handover from chatbot to live agent is possible when needed, where the agent already has access to the context of the query and customer details. Additionally, the introduction of the Microsoft Digital Contact Center Platform provides Insurers with a holistic view of the customer journey – you can find out more here.

Telefónica Tech is a Microsoft partner with extensive experience in helping Insurance customers embrace digital change, so please get in touch today if you would like more information.