P&C Insurance Has Entered a New Era
This is a time of rapid and accelerating change in our industry. Read on to discover what defines this new era, why insurers should care, and what Guidewire is doing to ensure that our customers are prepared for it.
Let's start by examing what has led us here...
What systems will be required for success?
All these changes beg the question:
IT Specialist
Claims Supervisor
Customer Service Rep
Agent
Customer
Actuary
Data Analyst
Billing Supervisor
In the Engagement Era, the guiding principle for systems is to enable insurers to meet users on their own terms, to provide the experiences and journeys that they want. Rather than equating “users” solely with customers, as most commentators do, we at Guidewire define “users” to be customers, agents, and insurance knowledge workers. The Engagement Era is in its formative stage and will persist for years to come.
2015–
Welcome to the Engagement Era
Click anywhere above to close
In the second era, the principal goal of system design was to help insurers enforce standard processes and management control across the insurance lifecycle. Enter web-based systems, modular core systems, systematized business rules, and straight-through processing. It was during this phase that Guidewire came to market with our ClaimCenter product and subsequently PolicyCenter and BillingCenter—providing a suite of core systems.
late 1990s to 2015
The Process Era
In the first era of P&C technology, the focus of system design was on capturing financial data, such as premium-in-force, policy limits, claim reserves, and many other examples. Mainframe systems became prevalent, helping to reduce paperwork and ensure adequate processing performance but hamstrung due to these systems’ inflexible and monolithic design and neglect for the needs of end users.
1970 to mid-1990s
The Transaction Era
1970 to Mid-1990s
The Transaction Era
Late 1990s to 2015
The Process Era
2015–
A New Era
We recently interviewed a group of young business owners in New York City and asked them about their expectations when engaging with their insurers. You can see their feedback by watching this short video.
24/7 Self-service
24/7 Self-service
Today’s users expect information at their fingertips, such as agents looking to service a policy, or underwriters assessing the risk of a given policy.
Personalized Products
Personalized Products
From products and pricing to how they are serviced, the expectation is that everything is customized and not one-size-fits-all.
Intuitive User Experience
Intuitive User Experience
A consumer-like experience with intuitive and dynamic screens is necessary to meet users on their terms.
Real-Time Response
Real-Time Response
Policyholders, knowledge workers, and agents alike expect rapid response, fast answers, and quick reaction regardless of the channel.
Fast Claims Settlements
Fast Claims Settlements
During the greatest time of need for a policyholder, the ability to quickly and seamlessly engage all parties from vendors to adjusters provides for rapid claims resolution.
What do today's users expect?
24/7 Self-service
Personalized Products
Intuitive User Experience
Real-Time Response
Fast Claims Settlements
The system must support core operations, data and analytics, and digital engagement in a cohesive, orchestrated manner.
All users must have a consistent and efficient journey across a variety of channels and across the entire insurance lifecycle.
Users must have an interactive and rewarding experience on all devices and platforms.
Systems must apply data, machine learning, and context to guide processes and decision-making.
Systems must be interoperable with other components and systems.
Unified Core/Data/
Digital
Omni- Channel Design
Consumer Grade UX
Predictive, Guided Processes
API-Driven Design
And just what technology is required to
fulfill their expectations?
Channels
Digital Experience solutions need to support a variety of channels and engagement modes.
Engagement Modes
There are three engagement modes: self-service, assisted service with the help of a call center or agent/broker, or a service completely delegated to an agent or broker.
Operational
Systems
Operational Systems must support the journeys for both transactional and analytical purposes.
Journeys
Designing for user engagement starts with user journeys that focus on user-specific objectives.
Agents or brokers managing leads or processing renewals
Vendors wanting to deliver services and get paid for them
Consumers researching and buying insurance or making adjustments to their coverage over time
Commercial customers managing their claims or reducing their risk
Operational
Systems
Integration
Operational Systems must support the journeys for both transactional and analytical purposes. In fact, they must support all of the permutations of channels, engagement modes, journeys, and integrations that make up the total engagement experience that we aspire to support.
Channels
Engagement Modes
Journeys
Digital Experience solutions need to support a variety of channels and engagement
modes for each journey.
These journeys require seamless integration between Digital Experience solutions and
Operational Systems of record.
Designing for user engagement starts with user journeys that focus on user-specific objectives.
Agents or brokers managing leads or processing renewals
Vendors wanting to deliver services and get paid for them
Consumers researching and buying insurance or making adjustments to their coverage over time
Commercial customers managing their claims or reducing their risk
Anatomy of an Engagement Era System
Easy FNOL
from anywhere
Self-service
policy changes
Quick quoting with minimal data entry
On-Demand and Interactive Analytics from InfoCenter
360° Account View across Policy, Billing and Claims
360° Account View across Policy, Billing and Claims
Dashboard highlighting work-in-progress and priority activities
Digital + Core = Better Experience for Agents
Spotlight Risk Evaluation
Underwriting Management and Agent Collaboration
Risk Scoring for Claims Escalation
A warning appears on the claim summary screen, and the Bodily Injury exposure shows “High Risk” of escalation
The rating worksheet shows the Predictive Analytics adjustment factor in the calculation of premiums along with existing rate modifiers
Automatically increase or decrease the calculated premium based on Predictive Analytics rating factors
Predictive Rate Adjustment
View shared timeline of all policyholder account activity
Claims Supervisor
Pricing Actuary
Customer Service Representative
Customer
Agent
Underwriter
Click below to see how.
At Guidewire we are designing and building our products to meet the demands of the Engagement Era.
Learn more about Guidewire's vision of the Engagement Era by watching this short video of CEO and founder Marcus Ryu.
Why Insurers Should Care
* Tanguy Catlin, Somesh Khanna, Johannes-Tobiaz Lorenz, and Sandra Sancier-Sultan, “Making digital strategy a reality in insurance,” September 2016, McKinsey & Company.
Consulting firm McKinsey answered this well in a report published in September 2016.* According to McKinsey’s research, insurers in the top quartile of technology investment are growing twice as fast as their less advanced peers. At the same time, they are delivering better profitability, with the top quartile (in terms of technology investment) having a combined ratio 6% less than their peers.
This is how insurance employees typically spend their time.
45%
Basic Processing Tasks
35%
Procedural Compliance
15%
Interaction Tasks
3%
Best Practice
Evaluation
2%
Expert
Evaluation
Data Entry/Clerical File Work
Answering Queries
Standard Correspondence
Enforcement of Process Steps
File Documentation
Assignment
Issue Resolution
Vendor Performance Management
Negotiation
Underwriting/Claims Judgement
Medical Evaluation
Liability Judgement
Complex Underwriting
Large Losses
Litigation Strategy
Employee Mentorship
However, by adopting Engagement Era systems, which are optimized to make insurance employees more efficient and effective, insurers will gain time that can be invested in more strategic work, so that workers can better apply their expertise and experience, and so that personal interactions can offer additional value. In addition to freeing up time, the morale of workers will increase—which itself will result in better quality of service to policyholders and agents.
Insurance employees spend far too much of their time on repetitive, mundane work that offers little value to the policyholder or agent. Guidewire’s Value Consulting team has worked on more than 300 engagements over the last decade. Based on this experience, we estimate that 80% of workers’ time is spent on basic tasks and compliance.
Elevating the Work of Insurers
Thank you for reading. If you'd like to learn more about the Engagement Era and how Guidewire Software can help insurers like you, please fill out the following form and we will get in touch.
www.guidewire.com
