Agility in Insurance - Whitepaper


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Agility in Insurance - Whitepaper

  1. 1. A perspective on Agility in Insurance Rupesh P. Practice Lead - Insurance Vertical NIIT Technologies White Paper
  2. 2. CONTENTS Current Environment 3 The Case for Agility 3 How Organizations are Pursuing Agility 3
  3. 3. Current Environment The insurance industry is confronting significant challenges – pricing, diversified billing and payment options and real time self service capabilities. changing weather patterns leading to more intense weather events, changing demographics, regulatory pressure and complex challenge, given the economic situation and the competitive How Organizations are Pursuing Agility landscape. Successful players are repositioning and reinventing Carriers are pursuing agility to enable them to react quickly to the their products, strategies and services. They are also taking changes in the business environment described above. One of the significant steps to position themselves for growth and profitability biggest challenges carriers face is their dependence on archaic in this competitive, lower-margin market. and inflexible legacy systems. Adding new products or making macroeconomic conditions. Organic growth continues to be a changes to existing products can be a challenge when operating on these rigid legacy systems. Meeting consumer expectations by The Case for Agility providing more self service capabilities online can be a challenge Organizations are struggling to keep up with the various changes in as well. Many carriers are in the process of transforming and regulations while trying to innovate to keep up with a highly modernizing their architecture in an effort to be more agile. Well competitive market place using scant resources and shrinking architected modern distributed systems provide the platform for budgets. Carriers are attempting to leverage technology to create a carriers to keep up with the changing business landscape. platform that makes it easy to adapt to changes whether triggered by regulations or a changing market landscape. A flexible modern Policy Administration Systems (PAS): Many carriers have several architecture will allow carriers to release new products and make disparate PAS systems – both built in house and vendor based changes to existing products quickly. Shifting demographics and legacy solutions. Carriers are looking at consolidating these different increased usage of mobile devices are transforming long standing PAS systems on one distributed platform. In the interest of time to distribution models. The buying behaviours, attitudes and preferences market, most carriers are looking at distributed vendor solutions over of customers are evolving. Carriers need to adapt to these changes building their own solutions in-house. This means carriers need to be and find ways to attract and retain these customers. open to changing their business processes to adhere to the out of box process flows. It is vital carriers do not over customize vendor In an uncertain economic environment, there is increased pressure to solutions as this will hamper agility. It will make future upgrades and improve underwriting ratios. It is becoming even more crucial to changes more complex. These PAS solutions allow underwriters to assess risk accurately and provide the optimal price. Carriers realize automate manual and paper based processes through the use of they will have to leverage data to create predictive models that sophisticated work flows. They also allow for real time quotes and accurately assess risk and provide the best price. Carriers need to instant conversion of quotes to policies. identify new avenues for value creation while continuing to meet opportunity for carriers to implement straight through processing emerging regulatory changes such as Solvency II and IFRS. with minimal underwriting referrals for simple lines of business – for It is also an excellent example personal automobile LOB. It also provides tools for better Carriers are under pressure to reduce underwriting costs while communication and tracking with the use of activities/diaries. continuing to grow their customer base and keep up with changes Carriers are also looking to implement predictive models that in regulations without increasing head count. Customers and provide a much more accurate assessment of risk than traditional producers expect the ability to process quotes faster, competitive rating algorithms. 3
  4. 4. These predictive models are created by sophisticated data robin process of randomly allocating claims to claim adjusters within analytical techniques that scrutinize the carrier’s book of business. an area. This resulted in certain claims adjusters driving past certain These predictive models are than implemented using modern rules claimant addresses on their way to working on claims that were engines and come up with a tier that represents the risk posed by assigned to them. Usage of GIS information allowed this carrier to the customer. This determines the pricing structure in conjunction intelligently allocate claims taking into account the claim adjusters with modernized rating algorithms. Carriers are now offering current location. Usage of mobile claims apps that allowed claims innovate usage based insurance product offerings. Technologies adjusters to capture all the information including photographs using like GIS, analytics, big data and telematics are used to provide a one single device (for example a tablet), can bring about operational different set of products that follow rating models that leverage real efficiencies and eliminate the need for them to take physical notes time driver behaviour and usage patterns and differ from traditional that need to be than manually typed into the computer once they rating processes – for example those that heavily weigh claims are back at the office. Carriers are looking to use these flexible history, violation history, etc. claims system to enable their claim adjusters to focus on higher value claim management activities with the automation of low-level Claims Administration Systems (CAS): Most carriers are looking at tasks and achieve quantifiable loss cost improvements through their claims processes very closely for two reasons - ensuring the consistent application of best practices reinforced via performance best possible customer service is offered by providing a fair and improvement support capabilities. transparent claim handling experience and creation of efficient claims processes that reduce the time and expense to service a claim. For Billing Systems – Carriers are looking to modernize their billing solution most carriers claims tend to be an area that is very manual and with the intention of providing customers more options, letting them paper based. Most carriers are focussed on implementing Claims choose their payment schedule as well as how they receive and pay Administration Systems that are based on modern distributed their bills. These new billing solutions provide various forms of billing architecture. These systems have built in work flow processes that and payment options. These systems automate sophisticated billing allow carriers to eliminate manual paper based processes. processes with flexible workflow and business-rule driven control. Digitalization with the usage of modern document management These modern billing solutions help identify uncollected earned systems allows carriers to archive these claims files and provide a premium to reduce billing leakage, combine invoices to reduce costs, much better mechanism for disaster recovery than the traditional and leverage equity-based billing to avoid unpaid coverage. They also paper based approach. It also provides claim adjusters with the provide the customers with the “green” option of paperless delivery mechanism to view prior claim documents and images easily during which results in huge cost savings for the carrier. the claim handling process. In one instance, a claims adjuster for a particular carrier noticed that the roof damage photos submitted for For most carriers this transformation will be a multi-phase initiative, the claim were the same as the ones the insured had submitted the with each phase taking between 9 to 18 months. While the carries previous year. Technology can be used to prevent fraudulent claims go through the complex transformations illustrated above, it is vital like these while at the same time offering better service to customers they leverage Enterprise Architecture best practices and create a by processing genuine claims quickly and transparently. Customers future state IT roadmap that aligns with their business goals and can also view the current status of their claims online through the priorities. Defining the architecture that depicts how the integration carrier’s portal or mobile claims app. The system can also be between different systems will be accomplished and also designed to send notifications to customers alerting them about addresses security and physical infrastructure upfront will reduce changes during the claims process. The entire FNOL process and the risk of delivery and also ensure the systems built will be flexible claims allocation process can be streamlined with the application of and agile to meet the ever changing needs of the business. technology. For example, a particular carrier was following a round 4
  5. 5. About the Author Roopesh Poojary is the Practice lead in the Insurance vertical at NIIT Technologies. He has over 17 years of leadership experience in IT Delivery, Enterprise Architecture, Program Management, Process Improvement and Services Management. With 12 years of experience in the insurance domain, he has successfully led several large core system transformation/replacement programs. Rupesh has done his Master’s in Business Administration and Finance from Indiana University in addition to a Bachelor’s Degree in Engineering.” About NIIT Technologies NIIT Technologies is a leading IT solutions organization, servicing customers in North America, Europe, Asia and Australia. It offers services in Application Development and Maintenance, Enterprise Solutions including Managed Services and Business Process Outsourcing to organizations in the Financial Services, Travel & Transportation, Manufacturing/Distribution, and Government sectors. With employees over 8,000 professionals, NIIT Technologies follows global standards of software development processes. Over the years the Company has forged extremely rewarding relationships with global majors, a India testimony to mutual commitment and its ability to retain marquee clients, drawing repeat NIIT Technologies Ltd. Corporate Heights (Tapasya) Plot No. 5, EFGH, Sector 126 Noida-Greater Noida Expressway Noida – 201301, U.P., India Ph: + 91 120 7119100 Fax: + 91 120 7119150 business from them. NIIT Technologies has been able to scale its interactions with marquee Americas Certification, assessment at Level 5 for SEI-CMMi version 1.2 and ISO 27001 information NIIT Technologies Inc., 1050 Crown Pointe Parkway 5th Floor, Atlanta, GA 30338, USA Ph: +1 770 551 9494 Toll Free: +1 888 454 NIIT Fax: +1 770 551 9229 security management certification. Its data center operations are assessed at the international clients in the BFSI sector, the Travel Transport & Logistics and Manufacturing & Distribution, into extremely meaningful, multi-year "collaborations. NIIT Technologies follows global standards of development, which include ISO 9001:2000 ISO 20000 IT management standards. Europe NIIT Technologies Limited 2nd Floor, 47 Mark Lane London - EC3R 7QQ, U.K. Ph: +44 20 70020700 Fax: +44 20 70020701 Singapore NIIT Technologies Pte. Limited 31 Kaki Bukit Road 3 #05-13 Techlink Singapore 417818 Ph: +65 68488300 Fax: +65 68488322 Write to us at D_52_231213 A leading IT solutions organization | 21 locations and 16 countries | 8000 professionals | Level 5 of SEI-CMMi, ver1.2 ISO 27001 certified | Level 5 of People CMM Framework