While the insurance industry may be considered conservative when it comes to IT, technological innovation is seriously impacting how insurers conduct their trade.
The KPMG General Insurance Industry review for 2018 noted that technology was one of the two areas drawing the most attention in insurance: “We continue to see a number of emerging trends that will impact the industry in both the short and long terms. These trends are largely split between those driven by technological advances and those impacted by regulatory developments.
As the report notes, technology provides insurance companies with the opportunity to deepen customer engagement, find new value in non-traditional assets such as data alliances and networks, improve the speed it does business and, through automation, run a lean and more productive organisation while offering sophisticated products in the market.
Despite the interest, however, insurance organisations are still slow to pull the trigger on major transformation projects. “Most began with ambitions to disrupt, but their enthusiasm has been tempered by the reality of investments, regulations, capital requirements, and the risks and challenges of offering something new to cautious customers,” according to the KPMG report.
Duck Creek Technologies has grown rapidly in Australia and the Asia-Pacific region on the back of its reputation as a specialised partner that helps insurers realise their technology ambitions while managing their risk profiles at a lower Total Cost of Ownership compared to others in the market.
Duck Creek Technologies managing director, Shaji Sethu, said key to its role was being able to understand the unique challenges facing insurers, and then articulate technology solutions on their terms.
The company provides organisations with a SaaS platform – in fact, it claims it’s the first SaaS solution designed specifically around the unique environment that the vertical operates in. It enables insurers to manage policy, billing, claims, and distribution management in the cloud, while providing deep insights and digital engagement with customers.
The open platform, with a broad partner ecosystem built around its API, is designed to consolidate and centralise the entire IT environment for the insurer, enabling them to operate with greater agility.
The Duck Creek Platform has been designed to give insurers a broader reach into the market. According to Duck Creek Technologies’ Pace of Change survey – a major study designed to understand the specific drivers behind the transforming businesses in the insurance space - only 10 per cent of insurers benchmark customer engagement against organisations outside of insurance. However, as insurance companies increasingly look to develop a platform to sell insurance online, there is a lot they could learn from market giants such as Amazon, Apple, Google, and other digitally-driven businesses operating outside the industry.
“Insurance organisations have traditionally believed what they sell is really complex. It's not like selling books online and, because the level of complexity, they don't have to deal with or compete with the likes of Amazon and others and, as such, don’t have to benchmark themselves against those,” Sethu said. “It's a sort of echo chamber that they operate in.”
“But now those non-traditional players are moving in. Amazon is planning to launch insurance product in India, for example, and that’s a wake-up call. Customers do expect to buy an insurance policy in a couple of seconds, just as if they were buying shoes. What Duck Creek is doing is working with insurers to modernise their platforms such that insurers can provide exceptional customer service to their customers. Duck Creek was able to demonstrate this with the launch of Cerity in US. Cerity sells complex Workers Compensation insurance online direct to small business owners with a few clicks.”
A recent survey from McKinsey suggests that just 14 per cent of digital transformation projects succeed on any level, and only three per cent are considered a “complete success”. The insurance industry faces a steep uphill battle in tackling its own digital transformation projects, but Duck Creek helps its insurers deliver on their transformation projects across three key areas:
- Aligning front, mid, and back office seamlessly – There’s no use having a nice front-end that can’t be supported downstream and leaves customers disheartened when they want changes to their Policy. Duck Creek helps insurers understand that the focus needs to be on the customer experience.
- Leveraging data – Providing insurers with a complete closed-loop analytics solution. This is delivered with the philosophy of always having the “jeweller’s screwdriver” ready to tweak offerings to the market based changing customer sentiment or competition activity.
- Agility and speed of change – Duck Creek helps organisations launch new products within days, or adjust pricing within hours. Duck Creek has helped implement complete Policy, Billing, Claims with integrated analytics in months as opposed to years the industry has been used to.
Success in transformation rests on the ability to start small and go live with a new platform within 12 weeks. From there, it’s important to be able to make changes quickly and assess their impact, and gain insights from clean data sets, both internal and external, to help make decisions faster. As evidenced by recent implementation at SIRA, a NSW Government Regulator.
“It’s important to take an end-to-end perspective, and align the front and back end seamlessly,” Sethu said. “For example, there’s no value in being able to transact online if the rest of the policy process then needs to take place manually.”
“Our success and growth in the market is in helping insurers break away from their legacy, siloed approach to technology and into an open platform approach.”
To find out more about Duck Creek Technologies, click here.