The insurance industry is complex even by financial services standards. Products are long standing and are frequently updated meaning many versions of the products are in force at any one time. Many insurance companies are still operating legacy technology. Data is often fragmented and siloed in different systems and business processes making it difficult to get a consolidated view of business activities. Regulation is leveraging up, as an example APRA will soon require more granular data in their returns from insurance companies. With constant pressure to measure costs with a high ROI, the big question is how insurance companies can use technology to modernise their business, improve compliance and defend against future disruption.
For technology to make a difference, insurance companies need real time insights across a consolidated view of their business activities with the ability to drive deeper insights and actions across the whole of data.
Challenges facing the Insurance Industry
1. Data spread out – How do you see your business activities?
Most insurance companies have data spread across a myriad of systems. Many of these are legacy systems and unstructured data, such as voice and documentation, are yet to be tapped into in any meaningful way. Obtaining a view across all of this data is critical to understanding your business. However, many organisations are weary after big spends on data warehousing projects, which often only deliver a partial view of business activities, a day or two after they occur.
Without the benefit of real time insights, this timely process of collecting data makes it difficult to manage the business, considering both operations and risk. As an example, how do you correlate, in real time, a claim phone call with policy information and broad statistics, and measure how these types of claims have been treated in the past?
2. Increasing regulation and cost of compliance
The Insurance and Banking company Royal Commission reported a step change in scrutiny for Australia’s Insurance sector. Complying as an insurance company is a greater challenge than ever and failing to manage your risk carries a huge reputational, financial, and personal risk for business leaders.
The Holy Grail is to automate compliance giving you 100% coverage of business activities with risk and compliance personnel shifting to oversight and managing exceptions.
3. Risk of Disruption
Insurance is one of the oldest and most established financial industries which has so far remained largely un-touched by the global tech giants or Fintechs. However, a growing concern amongst Insurance CEO’s is disruption. With legacy technology, most insurance companies lack nimbleness and responding to future disruptions will be a major challenge when it comes.
4. Deteriorating operating environment
Economic hardship, including a predicted 50% chance of recession, will drive increasing claims and financial requests towards Insurance companies. In this environment, Insurance companies will be faced with similar pressures to those experienced during the global financial crises.
Tight management of the business operations, real time view of risk and the ability to shift resources quickly to the areas most needed, will be critical to navigating the insurance industry environment in the years to come.
But how can you achieve this when you can’t clearly see your business activities in real time and you’re working with partial information, that is a day or two old. This is the challenge.
The benefit of using Fifth Logic iQ to overcome data challenges in the insurance industry
1. Data fabrics give you a single view of all business activities
Fifth Logic iQ (FLiQ) uses data fabric technology to ingest broad data sets, in real time, to drive insights and actions based on an up-to-the-second view of your business activities.
By using FLiQ you can ingest account data, CRM data and voice data in real time. If you correlate all three, your insurance company will gain deeper insights into your business activities.
2. Automate compliance
With an up-to-the-second view of your business activities, FLiQ can automate compliance in real time.
FLiQ uses no-code technology, allowing all employees to see and understand business operations. Risk and compliance staff can transition out of repetitive compliance tasks and instead focus their efforts on the rules that comply the business.
Artificial intelligence learns where the risks are and flags up exceptions for your risk and compliance team. With so much sensitive information in unstructured data (eg. voice, email spreadsheets etc), FLiQ can use Natural Language Processing (NLP) to transform it into intelligible formats, critical to automating compliance.
A great example of a process that can be simplified and automated using FLiQ can be seen in the claims administration process:
FLiQ can assist by:
Driving deep insights into client conversations using AI and NLP
Processing and tagging the PDS documents for the policy and compare them to the claim.
Applying business rules and AI to package the expertise in your senior claims administrators and make this available for three or more junior staff.
Automating compliance across client calls with 100% coverage with only exceptional cases being escalated to a compliance officer.
Increasing the productivity of your claims by automating file note creation using AI and NLP.
Flagging areas of hardship requests where staff anguish is high in responding.
Doing all this in real time.
3. Speed of implementation - An impressive return on investment
Data warehouses have traditionally been the approach to combining data from many systems to create a consolidated view. These systems are often gargantuan and take many months or years to implement. Even when implemented, they are often brittle in nature and take many months to change.
FLiQ uses data fabrics which dramatically speeds up implementation time, often with business value delivered in weeks not years. This dramatically reduces the cost of implementation and ongoing changes resulting in a healthy ROI for the platform.
There is no doubt the financial industry needs better, automated data collection technology. With global economic pressures ever increasing, the insurance industry needs to find smart ways to stay on top of data collection and efficient business systemisation, that cuts down processing time and inefficient use of resources, in real time. Fifth Logic iQ was created with this in mind.
If you are looking to take your business to the frontline in data processing and business efficiency, our team is ready to help. Book a spot in our accelerator program and let us help you reclaim your sleep, by breaking down data issues to restructure and improve core business processes.