Innovation Stories: How Insurance Industry Is Digitizing

While the term “digital insurance” was first used to refer to disruptive insurance business models, most companies in the sector chose a different path to digitizing. They streamlined their efforts on automation, processes optimization, and improving customer experience. In this post, we explore why insurers most often partner with technology companies to innovate and outperform competitors in their rapidly changing industry.
9 min read
09/02/21
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By Peter Rakowsky
Global Innovation Manager
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Innovation Stories: How Insurance Industry Is Digitizing

Companies in conservative industries like insurance, or financial services are historically hesitant to pursue digital transformation. However, in recent years, insurance carriers adopted a pragmatic agile approach and started a massive leverage of technologies. This trend accelerated during the first months of the Covid-19 pandemic, when all-digital trends sped up quickly.

According to recent research by Gartner, a small number of insurers have already achieved digital maturity, but the majority is still catching up. Only 50% of insurance companies are currently scaling or refining their digital initiatives, and only 11% believe they are effectively harvesting results from digitization.

Graph Showing Digital Maturity Level of P&C and Life Insurers

After the pandemic subsides, it will be increasingly important to be agile and operationally nimble. The digital insurance services market is rapidly growing, which means it is more important than ever to have the support of experienced technology vendors.

Insurance Innovation Accelerates Like Never Before

Insurance companies are setting ambitious goals, including improved service, a better omnichannel experience for customers, better use of analytics and data-driven insights, and automation of routine processes. But some insurers still have a long way to go before they achieve these goals. Oftentimes, the source of these insurers’ problems are their bulky legacy systems, which can hinder a digital transformation.

Carriers should partner with a technology company that has deep domain expertise and a broad technological outlook. This company can advise the carrier on the best combination of tools for their digitizing journey. Here are a few examples of insurance vendors that formed these partnerships and are already reaping the benefits.

Selective Insurance

Selective Insurance, one of the highest ranked P&C insurance companies in the U.S., partnered with a custom software vendor to complete a massive digital transformation of its legacy platforms. It developed an automated system for policy reviews and demand management, which helped Selective Insurance rationalize and optimize its underwriting processes. Automation of repetitive routine efforts of the underwriting team resulted in a 60-70% improvement in efficiency.

Genworth Financial

Genworth Financial is a S&P 400 insurance provider that has been helping its clients prepare for the financial challenges of aging for more than 150 years. A few years ago, the company embarked on a digital transformation with the help of a tech partner. The insurance vendor invested in a modern system called Genworth Smart Hub, which meets its business and customer needs and consolidates data across systems.

As a part of its transformation journey, Genworth Financial also implemented RPA for some manual processes in its financial department, including reporting, reconciliation, auditing, and data processing. As a result, the company expects to save up to 50,000 hours of manual work every year.

Symetra

When Symetra Life Insurance Company, an American financial group, offering retirement, annuities and life insurance, planned a digital transformation of a core platform, its key priorities were flexibility and rapid TTM for new digital products. The vendor also sought to provide more efficient data processes and better availability for its customers. To accelerate these initiatives, Symetra opted for Socotra, a cloud-based platform for technology-driven insurers. Socotra’s future-proof, cloud-native technologies and agnosticism to distribution channels help Symetra rapidly expand product offerings, while maintaining a relatively low TCO.

DataArt has many years of experience in insurance software development and integrations. We have helped many clients transition their existing architectures to platforms like Socotra and BriteCore.

Get Help with Insurance Software Integrations

Liberty Mutual Insurance

As a part of its pandemic-driven digital transformation journey, Liberty Mutual Insurance, the world’s sixth-largest property and casualty insurer, accelerated the use of cloud technologies and processes automation with AI and ML algorithms. The company is on its way toward digitizing everyday operations along the customer journey and the experience of in-house employees and brokers and agents. The insurer is performing an in-depth data transformation that will eventually turn Liberty Mutual into an “intelligent insurer,” a company that uses advanced data and analytics for its strategic business decisions.

How DataArt Helps Insurance Companies to Innovate

For years, DataArt has been offering insurance software development services, including re-engineering of legacy systems, development of custom document and claims management platforms, and implementing blockchain technologies for insurance ecosystems. You can learn more about our services from the success stories below.

Blockchain-based Platform for a Leading U.K. Insurer

DataArt partnered with Legal & General (L&G), one of the largest providers of insurance and investment management services in the U.K., to build a global-first solution for reinsurance. Using blockchain technology, the DataArt team automated calculations and made transactions more secure and transparent, while meeting all compliance regulations.

As a result, the complexity and costs of bulk pension risk transfers were reduced, and process speeds increased drastically — from months to minutes. The labor costs saved by the newly developed, revenue-generating technology now allow L&G to scale operations and engage even more clients.

Read more about the system DataArt built for Legal & General.

AWS Lake House Blueprint

Legacy insurance claims systems, which are still in use at many companies in the industry, adversely impact insurers’ ability to digitize and innovate. These systems become more expensive to maintain every year, even if the carriers already invest in some form of automation. These systems also come with a host of side effects, including resource and capital drain. They still rely on lots of manual processes, resulting in delayed payouts, unsatisfied customers, and improper use of customer data.

To optimize manual, inefficient and time-consuming processes of dealing with insurance claims, DataArt built a data and claims accelerator that serves the needs of adjusters in most insurance companies. We deployed Lake House Blueprint on Amazon Web Services (AWS) infrastructure, where all data is easily accessible in Redshift and neatly visualized in QuickSight.

Video Youtube AWS Data Lake House Blueprint Webinar

Data-Driven Warranty Management Solution for a Vehicle Service Provider

One of DataArt’s recent clients, a large warranty provider distributing vehicle service contracts, had reached the capacity limit on its platform. It was too hard to maintain and upgrade, and the tools company management used for decision making were constantly delayed.

To eliminate the risk of business losses and violation of critical non-functional requirements, the DataArt team started refactoring the data warehouse, modifying the legacy system, and enhancing analytic reporting. The project required modification and support of legacy Oracle databases, functions, procedures, packages and more. This involved:

  • documenting the existing functionalities
  • supporting and administrating all current services
  • investigating and researching activities to build new BI reports
  • creating a new DWH system using new principles and methods

In the course of the project, data processing times were aligned with operational time, and the “single point of truth” principle was restored, which facilitated better decision-making in the company. By meeting all requirements for a modern warranty management platform, the DataArt team enhanced security and compliance components, promoting further business development for the client. 

Advantages of Partnering with a Technology Vendor Instead of Using In-House IT

Insurers often prefer technology vendors to their own in-house IT teams when planning a digital transformation because vendors can provide development speed and experience with the latest technological innovations.

Development Speed

Tech providers maintain a rich talent pool, meaning that it usually takes only a few weeks for them to staff a dedicated engineering team. Hiring and on-boarding an in-house engineer often takes much longer.

Custom software development companies also have broad experience in integrating off-the-shelf products, platforms, and solutions for the insurance sector. This allows carriers to carefully plan a transformation roadmap and control how much it costs to move from one milestone to the next.

Technological Innovations

Software development vendors are familiar with most recent technology innovations and trends. They have often used these tools in prior projects, and know which tools and tech stacks work better than others. In-house IT teams, while proficient in software already in use by an organization, often lack a broader technological knowledge base.

Tech companies have a proven vision of how technology is implemented in the insurance sector today because of their prior experience in similar projects.

Bottomline

If legacy technologies still prevent your insurance company from taking full advantage of the digital world, turn to a proven software development vendor for help. DataArt can assist you in planning and executing a digital transformation, regardless of the project’s complexity. We will also help your company join the ranks of “intelligent insurers,” companies that leverage data into actionable insights that help them move in right direction as consumer behavior and trends change. Contact DataArt experts today and let your digital journey begin!

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