Insurance companies seeking to make good digital investments need to reevaluate their legacy technology systems, according to survey results from digital intelligence company ABBYY.
As the workplace becomes increasingly digitized, ABBYY’s 2021 Digital Transformation Survey Results finds that the biggest barriers to digital transformation in the industry are:
Hard-to-replace legacy systems
Sixty-one per cent of 1,220 surveyed companies said legacy systems were their biggest impediments, followed by 42% for both budget approval and the skills gap.
On top of legacy systems, “there can be a legacy mindset,” says Eileen Potter, ABBYY’s solution marketing manager of insurance. “A more hybrid work model has definitely changed the industry.”
Potter says another challenge to workplace digitization is that many customers are changing their expectations and are increasingly adopting self-service methods.
“That’s a challenge to automation, because it’s really [about] insurers shifting their mindset,” she says. “You can do that on the personalized side a lot easier than you can the commercial lines side.”
She observes that personal lines may have a higher volume of transactions, but simpler underwriting and rating, whereas commercial lines have “a lower volume, but much larger transactions, and more complex rating [and] underwriting.”
Personal lines and commercial lines may be able to automate processes differently, she says, and recommends insurance companies “take a look at their processing ecosystems as they exist today, and think about ‘what new technologies can help where?’”
“It’s not about your technology objectives,” she emphasizes. “It’s about [your] business objectives. What are you trying to accomplish? Are you trying to write more new business?…Are you trying to reduce claim leakage? Are you trying to improve your customer satisfaction scores, are you having issues with your call center?”
Once companies identify their business objectives, Potter says they can use technology to facilitate transformation.
According to the survey results, insurers use these digital transformation technologies the most: data analytics (55%), business intelligence (52%), business process management (42%) and robotic process automation (39%).
Other commonly used technologies include process mining (32%), intelligent document processing (29%) and no/low code technologies (16%).
The survey finds many insurers monitor their progress towards digital transformation in three ways: 61% of respondents use business analytics, 29% use process mining and 28% use employee feedback.
Potter says these tools can be useful for insurers as they make the step towards digital transformation.
“You may have a hunch about, ‘Well, there could be a bottleneck here, or this isn’t working well here.’ But the data is really going to show you,” she says. “That’s really what process mining can tell you. It can say, ‘What’s the issue?’ And then help you to make a data-driven decision about how you can better automate those processes.”