We love a good panic as much as the next bunch. But we have to admit we’re not precisely sure what all the fuss is about when it comes to customer experience, particularly in the insurance industry. We completely understand its justifiably increasing importance. But self-service portals have been around long enough to have become entry cards or table stakes for most insurers and their software vendors. And mobile apps have proliferated quickly enough to have become de rigueur. So, what’s up?

Digits By the Numbers

According to a post from Lightico:

81% of companies expect CX to be the key battleground in the race for market dominance. Meanwhile, a McKinsey study shows that a whopping 70% of consumers base their opinion of a business on the quality of its CX. The importance of customer experience is true across product and service categories, and even more so when providers are selling intangible benefits … Digitization effectively shifts the focus from antiquated, manual processes to consumer-focused, digital processes.

The post refers to claims processing specifically, but its generalizations abide across all insurance transactions and interactions. But if insurers are conducting business on the Internet — if they’re already making information accessible and interaction possible with portals and mobile apps — isn’t that digitalization? We grant that more automation might be warranted. The refinement and extensions of automated processes are always evolving and improving.

According to Wikipedia:

The modern binary number system, the basis for binary code, was invented by Gottfried Leibniz in 1689 and appears in his article Explication de l’Arithmétique Binaire. The full title is translated into English as the “Explanation of the binary arithmetic”, which uses only the characters 1 and 0.

Granted, it took a while for those two digits to comprise the substance of our computer and mobile-phone communications. But we’ve clearly been at this for a while. It makes you wonder how it ended up in the spotlight now, doesn’t it?

We’re Getting There

We don’t know. But what we do know is that digitalization is well underway. The customer experience improves with every incremental expansion of digitalization. And anyone who’s not playing the digitalization game is not going to win the Customer Experience Sweepstakes.

Since it’s 2020, chances are you’re already in the game. Everything else is a matter of degree.

Don’t panic.

Back at the turn of the century, with Y2K behind us and a new millennium of technology ahead, we were hearing the term, disintermediation, quite a bit. The prevailing assumption was that technology and e-commerce (remember e-commerce?) would replace the agents from which people had theretofore purchased insurance. Even as late as February of 2015, Insurance Business America proclaimed, “One in four insurance agents will be gone by 2018.” It would appear that prognostication hasn’t exactly borne out. And it’s a pretty safe bet the Big “I” didn’t get the memo. But we’re not wading into that particular debate.

Rather, we’d like to share some surprising (at least to us) statistics from Forrester’s Consumer Technographics® North American Healthcare Topic Insights 2 Survey, 2019 (US), in which 4,699 US adults were surveyed online. More specifically, we want to share findings in four different claims-related activities. Here they are:

1. When filing a claim 41 percent of respondents said they use digital self-service tools. The other 59 percent preferred to work with a person.
2. When checking the status of a claim, 61 percent used digital self-service tools, while 39 percent preferred to work with a person.
3. To check the status of a payment, 74 percent used digital self-service tools, while just 26 percent sought the information from a person.
4. To dispute a transaction, only 32 percent of respondents used digital self-service tools, while 68 percent sought the help of a person.

Given that evidence, it appears that most people are increasingly comfortable with going online to file, check, and verify payment of their claims. But they clearly don’t want to be disintermediated from their money.

What’s the Upshot?

It’s often said that insurance constitutes the selling of a promise; that is, the insurer (or, in this case, the agent), by way of contract (the policy), is selling the promise of making the policyholder whole in the event of a loss. As it pertains to the contract and the mechanics of its fulfillment, folks are getting accustomed to our bold new technological world. And when it comes to providing information to all parties to claims transactions (insurers, agents, and policyholders), we’ll put our software up against anyone’s. But if a policyholder has a beef with a claims transaction, somebody better be by the phone.

Disintermediation? Not quite yet.

From conversations you’ve had with us, conversations you’ve had about us, and the messaging you’ve been exposed to (particularly in our blog posts), you’ve likely gotten the gist of our corporate culture. We aren’t a huge operation, but we consider that a strength. We aren’t a small operation, but we’ve managed our growth judiciously. As our workload increases, we’re able to scale our staff-counts to accommodate that growth. We’re not a start-up. We’ve been consistently providing a sound product for almost 20 years.

When we first heard about the recent lawsuit involving Peloton and Flywheel, we thought Peloton was using its size to crush a smaller competitor. We’re familiar with the feeling of having competitors much larger than we are. But we’ve been lucky that they’ve played fairly. There are plenty of big fish out there to which we might have been easy prey to unscrupulous competitive practices, especially in our early days. We sympathized with Flywheel. It seemed as if the big fish ate the little fish.

But as time went on, we learned the facts of the case. As the details began to emerge, we read this article. In particular, this quote from an internal Flywheel message that Peloton obtained during the case:

Discovery has now revealed that Flywheel engaged in an organized and illicit scheme, involving a significant number of Flywheel executives and employees, to obtain ‘as MUCH secret intel on Peloton as we can’ during the time it was designing and preparing to launch its infringing Fly Anywhere Bike.

The Morals of the Story

The little fish tried to steal intellectual property and market share from the big fish. That’s a different story. Stealing is one way to get ahead, but it’s not a way we’d ever respect or espouse. Peloton is fortunate to have had the size and the legal team required to stand up for itself.

The facts of this story also reminded us we may not always have correct first impressions. Open minds preclude rushes to judgment. And more facts yield better opinions.

We may not be the biggest, the smallest, or the newest fish in the policy administration sea. But, we’re happy to be swimming in it, with fair competitors, with conscientious customers, and with partners that honor our relationships.

You’d be forgiven if you thought business intelligence (BI) — along with its two close pals, data and analytics — were chief preoccupations for insurance companies. You’d be forgiven because, according to one study we’ve seen, between 2015 and 2020, somewhere in the neighborhood of 80 to 90 percent of property/casualty insurers considered BI and data analytics to be strategic initiatives. And you’d also be forgiven because Information Age published this:

Data analysis is one of the historical pillars of insurance. Actuaries have used mathematical models to predict property loss and damage for centuries. When they sell policies, insurers collect large data-sets about their customers that are updated when those customers make a claim. In recent years, as insurers have sought to become more relevant to their customers and more efficient, they have realised the strategic importance of their data investments. They want to harness data analytics to improve customer experience significantly, whilst cutting claims handling time and costs, and eliminating fraud.

You’d be forgiven … but you wouldn’t be correct.

Reality Check

According to Deloitte’s 2020 Insurance Outlook, “The vast majority of insurer IT spending still goes toward maintaining legacy systems.” So, the fact of the matter is that most insurers haven’t begun serious tactical initiatives to make the most of BI and data-analytics capabilities because they have other, more pressing concerns like the expectations of their agents, their policyholders, and their employees. And if insurers are saddled with legacy systems out-of-date enough to prevent them from meeting those expectations, BI and data analytics slide down the priority list a bit. And there are other considerations.

Most BI and data analytics applications are targeted at, best suited for, and most affordable for large insurers with huge volumes of data. But medium-sized and smaller insurers have affordable options that will at least let them relate claims to premiums, adjust loss-cost multipliers and rates, and weed out bad risks. But trying to layer capabilities like BI and data analytics on to legacy or poorly designed systems — and/or on to inadequate underlying architectures — adds technical challenges that may not be worth the risk and cost.

So, the big issues with BI and data analytics are antiquated systems, poorly designed systems, degrees of technical difficulty, and scarce resources.

Until those big issues are resolved, strategic BI and data analytics initiatives aren’t likely to become tactical, operational initiatives.

Since we’re software developers — and given the world’s tendencies toward complexity — we thought it might be a good idea to take a crack at simplicity. So, here goes:

The Finys Suite is effectively a property/casualty policy administration system … with a few operational goodies added on. More specifically, the Suite includes all of the capabilities required of a policy admin system:

1. Rating
2. Quoting
3. Binding
4. Issuing
5. Endorsements
6. Renewals
7. Workflows to manage 1-6.

Then we added:

• Claims to make it easier for insurers to keep their promises of financial protection to their policyholders
• Billing to make it easier for insurers to automate the calculation and collection of premiums, fees, and taxes
• Business Intelligence to make it easier for insurers to aggregate, analyze, and report from their data to improve decision-making
• Portals and mobile accessibility to make it easier for insurers to share information; allow agents, vendors, and policyholders to serve themselves; and to reduce service costs while increasing customer satisfaction
• Design Studio to make it easier for insurers to configure and manage the Finys Suite and the products they build with it.

Science Meets Art

Did the Suite take a degree of technical proficiency to develop? Yes. Did it require knowledge of the insurance industry and its operational processes? Yup. Did we architect the Suite so it will scale as insurers grow? Uh huh. Did we apply a little foresight to ensure the Suite is flexible enough to accommodate insurers’ needs in the future? We did that, too. Did our years of experience developing software and working in and around the insurance industry help? Well, they didn’t hurt. Did we decide to treat our customers the way we’d choose to be treated. Yes. Quite deliberately. And that’s made all the difference.

The science of designing and building rockets is as complex as it gets. But an effective property/casualty policy administration system doesn’t have to be anywhere near that complicated. By combining the science of technology with the art of customer care, we found out it doesn’t take rocket science.

It just takes a little Finys.