The insurance industry has been hyper-digitized by the sophistication of consumer expectations, exposure to significant climate, health, economic events, and regulatory adoption pressures topped with rapidly shifting market conditions, including the pivot onto the recent Long Duration Targeted Improvements (LDTI).
However, digitization does not always equal modernization. The industry still wrestles with dated, manual, and time-consuming processes often involving fragment legacy systems. At the same time, the war on talent is fierce and competition is very high.
Our series of articles regarding the recent changes with LDTI implementation surpass compliance and requirement examination and delve into the technological impact it brings about. This piece explores modernized ways the LDTI implementation yields on the insurance landscape while stressing the importance of the human element in equipping the workforce of tomorrow.
Processes and operational automation
Insurers are beginning to see major benefits in automating core enrolment, underwriting, claims, customer care, and financial processes. However, insurers need to equip the workforce of tomorrow with the right capabilities to stay relevant in the market and service the changing needs of customers.
One of the catalyst enablers to operations modernizations is Robotics Process Automation (RPA). It is the application of software robots, not physical robots, that mimic human action and connect multiple systems through automation without changing the existing IT landscape. RPA enables organizations to automate existing high-volume and complex process steps as if business users were doing the work. This is enabled through a virtual robot that captures and interprets data across systems, triggers responses, and communicates with other systems.
The graph below illustrates some common transformation use cases that leverage RPA automation in the insurance landscape.
Moreover, RPA relies on basic technologies, such as screen scraping, macro scripts, and workflow automation. Cognitive automation, on the other hand, uses more advanced technologies, such as natural language processing (NLP), text analytics, data mining, semantic technology, and machine learning to make it easier for the human workforce to make informed business decisions. It should be noted that the RPA does not require coding as it depends more on the configuration and deployment of frameworks, whereas cognitive automation uses machine learning and requires the extensive use of programming knowledge.
As a rules-based solution that works on the if-then principle, the RPA is a process-oriented technology, which is often used to work on time-consuming tasks that were previously performed by offshore teams. It leverages the capability of virtual robots to automate existing high-volume repetitive tasks by mimicking human actions.
Unlike RPA which uses foundational technology to mimic basic repetitive human tasks, cognitive automation enables the use of advanced RPA tools to execute more complex processes. Cognitive automation is needed when human intervention, knowledge, and decision-making become a factor in the process. Here, the machine goes through several human-like conversations and behaviors to understand how humans talk or behave and define their own rules. With the use of advanced technologies, cognitive automation can work with a high volume of unstructured data and understand how a human would talk, behave, and execute the right decision in a similar situation/process.
However, in speaking of taking the next level of modernization in the insurance industry, hyper-automation shapes a combination of advanced technologies such as RPA, AI, Machine Learning, and many more to enable the end-to-end automation of processes across the enterprise and amplify the overall ability to automate work.
Legacy applications are less nimble, less flexible, and less responsive to the ever-changing needs of employees and customers. In this competitive market, organizations often struggle to keep up with the newer technology but are constantly looking for ways to optimize the way their business operates with their internal processes and maximize efficiency by eliminating manual and redundant tasks.
Power Apps is great for replacing paper forms, legacy solutions, or even spreadsheets. It provides a low code, no code solution to enterprises struggling to streamline their business operations, and cuts down the cost of outsourcing or traditional in-house app development as it is built for users without any coding experience. Simple yet powerful capabilities enable you to develop business applications and automate business processes with a simple drag and drop features.
Customer and employee experience
The way businesses operate has changed as more employees work remotely. Accommodating remote-working or a hybrid model is imperative in order to modernize your workplace. With fewer in-person meetings, formal collaboration, and given the exponential growth of unstructured data internally, the complexity continues to rise while employee experience continues to drop.
The need for employees to access communications, collaboration, and content from anywhere on any device has become a necessity, and without it, employees feel disconnected which causes higher turnover.
In a way of embracing digital, many organizations are now investing in enhancing their customer experience models, and ultimately driving customer and employee satisfaction. As leaders continue to develop employee experiences to provide people with the resources and support to encourage thriving environments, organizations of all types face challenges, and insurance companies are no different.
To provide employees with convenient and secure access to company communication, tools, and information, businesses can capitalize on the use of Microsoft 365 tools with their new rolled-out products which can be embedded within MS Teams to enhance employee experience and modernize the workplace. You can now connect and embed those powerful tools and make MS Teams your one-stop shop for all your business’s collaborative needs.
Many organizations also struggle with understanding their organization’s future needs in the hybrid space and encounter gaps and challenges when modernizing their workplace. BDO leverages our proven Modern Work DNA framework using 23 traits that helps understand the challenges our clients face in the workplace, and identify ways to create a more collaborative, productive, efficient, and secure work environment that follows the PPTC model-People, Process, Technology, and Culture. These traits determine how well an organization is performing against the industry benchmark and indicate the areas for improvement.
By leveraging this approach, shifting towards a modernized workplace is attainable when developing strategies to adopt new and efficient ways of working.
Secure collaborative tools
With distributed teams, brand-new business models, and complex security issues, there is a strong need for secured collaboration as well. And often when collaborating, there is a need for sharing of documents internally and externally.
Enabling your workforce to access information and collaborate remotely across all devices is the heart of frictionless employee experiences. The engine that powers these experiences, however, needs a measure of protection. The security of your data is an absolute prerequisite of modern workplace activities. The right digital tools connect and support employees, wherever they are, to encourage productivity, engagement, and collaboration.
With the help of Microsoft Information Protection, Security, and Compliance capabilities, you can add an extra layer of protection when collaborating and sharing files with others. By classifying and managing information labels, it helps to identify sensitive information including emails, documents in OneDrive, MS Teams, and SharePoint online or wherever your unstructured data lives.
Information is growing faster than ever before and is stored in all different places. Finding the right information at the right place at the right time is a must. This is where document management comes into play. However teams decide to structure, organize, and manage their files and documents is key to finding the right information in the right place.
In this context, Microsoft 365 also provides the proper medium for powerful document management and a cohesive ecosystem in order to:
- Adhere to best practices in naming conventions for folders and files
- Setup up workflow approvals to ease up the approval process
- Avoid duplication of data
- Maintain one source of truth
- Classify data with the right labels for sensitivity and retention purposes
Digitizing your insurance company
By now, insurance companies must know that the advent of all these new technologies will lead to a leap in productivity through another layer of change with the LDTI. Part of this implementation resides in understanding and adhering to the requirements, whereas the core of it lies in the transformation journey and the adoption of technologies and strategies in order to comply with the new standard.
How Valani can help
Valani, BDO, and Optimus have come together to establish accelerators for the LDTI journey. Our accelerators do not only meet the compliance needs of LDTI, but also advance an insurer forward in the areas of financial transformation, operations modernization, and data innovation.
Valani Global’s Services
Valani Global supports life insurance companies in achieving their financial risk management goals through implementations of Moody’s Analytics solutions including AXIS and RiskIntegrity for IFRS 17.
Nazir Valani, President & Co-Founder