There is no doubt: we are living in volatile times that are impacting products, services, and processes.
Technology is breaking down barriers and re-defining business models. Many sectors are adopting and embracing change. However, leading analysts believes that insurance has been an outlier. But there are opportunities to change that.
What are the changes and who are the changers?
Employers are increasingly relying on contract workers, challenging traditional work relationships.
Manufacturers rely on continuous improvement programs, as well as lean and just-in-time processes to maintain competitive positioning.
Existing and emerging financial institutions are developing alternatives to traditional banking and are embracing multi-channel, digital and currency platforms based on new technologies, such as the blockchain.
Medial care is taking advantage of digital tools and re-configured treatment methodologies to ensure complete information for clients/patients.
In all sectors, big data and analytics are informing virtually all segments.
Is insurance an outlier?
In too many offices, insurance continues its traditional ways in placement and servicing of coverage:
- An application which prompts for all information is entered from scratch;
- Underwriters (and their assistants) check various sources to verify and amplify information;
- An annual contract is produced, with fixed terms and conditions;
- Throughout the term of the contract, endorsements are produced using many of the above steps, unless it is a new line of business which requires beginning from scratch.
(I recognize that forward thinking insurers have made significant progress using technology to improve processes, especially in small commercial and personal lines. However, many of the transformation projects focus solely on these segments. My sense is that much of mid-market and large commercial lines has been exempted from significant process improvement.)
A holistic view is possible …
According to one analyst, this is changing. And he has offered a name for it. Writing on the Celent blog, Analyst Juan Mazzini refers to it as “Kanban Insurance”.
Kanban is a term that was originally coined to by Toyoto, referring to automobile production control systems which enable lean and just in time production.
Mazzini believes that “insurance is changing in a way it will be lean and just in time also; … driven by IoT (Internet of Things) and digitally delivered and serviced.”
While Mazzini thinks that automobile insurance is the best example at this point, he posits that Kaban can apply to all lines of business: “moving away from the traditional concept of insurance pre-defined products where the customer chooses from a limited set of options (and within an existing LOB), to flexible insurance solutions which are a bundle of coverages, regardless of LOB.”
According to Mazzini, critical technology factors needing to support a new insurance construct which will rely on: “core systems functionality, digital solutions, data integration, analytics, machine intelligence”.
The application of these will demand capabilities to support complex integration including 3rd party partnerships, and determining infrastructure and data ownership.
These are complex requirements, but …
…when we look at other industries (health care is an example), they are not over the top. And the rewards are palpable for anyone who has worked in this area.
For example, Celent Senior Analyst Mike Fitzgerald will be leading a session on What’s Next in Policy Administration Technology which will focus on the need to integrate emerging technologies with current policy, claims, and administration systems.
In addition, the Keynote presentation and panel will present current information on the state of our industry in its journey to digital, and will discuss strategic necessities to provide a dynamic, multi-channel experience for clients where the context of their needs and preferences is understood.
We look forward to welcoming you on February 29, 2016.