In today's concrete commodity markets, the pandemic produced some unintentional volatility in the supply chain. GM, for example, is currently sitting on thousands of most built pickup trucks waiting for semiconductor ground for final assembly. [i] Car manufacturers are ready to lose billions of dollars due to supply chain disruptions. Or just look at the recent outage in the gas supply on the east coast due to the cyber attack on a major pipeline.
Many companies today are challenged by their own supply chain design. Today's "just-in-time" delivery system was designed to reduce the cost of purchasing and inventory, reduce the potential for waste and improve cash flow and profitability. They were not designed to be resistant to supply chain disruptions. And every part of a just-in-time supply chain can be affected by disruptions within other supply lines. For example, when the cargo ship, Ever Given, got stuck in the Suez Canal for a week back in March 2021
Like these companies, insurers are susceptible to supply chain challenges that they themselves have created. They have often "improved" insurance products by introducing additional complexity and better risk analysis without using the flexibility of digital technologies and cloud-based platforms. COVID tested and disrupted the insurance chains and found that some of them were missing.
Here is the good news. The digital vision we discovered in last week's blog leads to API-first, cloud-based, digital experiences that will not only be effective and resilient, but they will pay for themselves through improved customer and agent engagement and much greater profitability due to smarter risk choices and greater portfolio management. They will open supply chains by improving self-service and access to value-added services that offer choices and more. They will keep them open by using "always open" technologies in the cloud, and they will enjoy prices that match usage, where profitability matches scale.
For the past two weeks, we've been looking at Majesco's latest thought-leadership report. , Digital insurance: The inflection point for considering how insurance can match and beat customer expectations. Last week, we decided that insurers must pursue a digital vision that uses a 360 view of customers – both individuals and companies – to fulfill the market's desire to engage in experiences of real value. We introduced the idea of a 360 View over three priority insurance areas for value-driven digital impact:
- Customer service
- Portals for agent or employee benefits
The priority areas above are great examples for creating a new 360 view – something that is radically different from the past portals or older workbench solutions. Not only do user experience designs differ from a digital 360 View perspective, they also use newer technologies that can innovate in exciting new ways. These include digital platforms, data and analytics, and they include other ecosystem partner solutions and services.
Customer Service – 360 View
Characteristics of a great digital customer experience include choice, speed and convenience. A really good digital experience is rich in value-added features that increase customer engagement, which in turn can increase loyalty and retain.
So, what is a 360 View?
A 360 View is an approach that enables customers to do everything they need through a solution or app that is customized and provides an experience that goes far beyond just a single transaction. Instead of closed apps or transaction portals for policy services, billing, payments and receivables (as represented in customer pain in Figure 1), a 360 View provides a single customer engagement platform across a wide range of areas. 360 View connects via APIs to backend systems including policy, invoicing and claims as well as partner solutions such as workshops and car rentals to create a holistic and optimal customer-oriented experience that can be found with Amazon.
Figure 1: Customer 360 – customer engagement via a single platform
A 360 View provides access to every interaction with your brand. Customer 360 View moves insurers beyond incremental customer service to turn engagement into an experience of embedded empathy – a significant change and strategy that truly creates a customer-centric solution.
The Accidental Consequence of a 360 Customer Experience – Two-Way Benefits
Of course, all insurers want to offer an improved customer experience that keeps customers happy and engaged when they easily handle many of their important tasks. But it is still "portal thinking" until we connect customer use to new data and knowledge for the entire value chain. Can what we learn from customer service apps leave us behind for agency engagement? Can the information we receive from a customer portal also improve our understanding of risk when we improve our understanding of insurance use?
For example, in Majesco's customer survey, we found that between 50% -68% of individuals would like the ability to turn off or turn on their insurance with a mobile app. If this was currently possible within operator apps, consider how much data actuaries and analysts would get in terms of actual usage and actual risk. This type of information would dramatically improve the understanding of portfolio risk anywhere in time.
This is an equation for improved profitability. Customers hold on because the insurer has a winning experience that is integrated and seamless as shown in the webinar, Customer360 – Create an enriched digital customer experience. Profits increase as customer data feeds portfolio and risk management systems, including other relevant systems such as receivables and marketing.
Agent Portal – 360 View
In the same way as historical customer portals, agent portals have followed the same path. But with increased competition over where agents should conduct business, insurers must prioritize being "easy to do business with" very high. As insurers digitally enhance front-end capabilities to enhance the agent experience, the requirement to look at this holistically across different touchpoints and agent journeys is extremely important in creating solutions that make it easy to do business.
In particular, Agent 360 View should include features that support digital licensing and boarding, quotation and binding, compensation and incentive status display, reporting and dashboards, and access to digital marketing assets, as shown in Figure 2.
Figure 2 : Agent 360 – Agent Engagement Through a Single Platform
In the 2020 Forrester Wave Report, one of the key criteria includes robust front, center and back office features, represented in the next generation Agent 360 View that goes far beyond traditional agent portals under the last ten years.
The agent's world is changing dramatically. New competition is emerging. The insurers' ability to engage top distributors – both existing and a new digital generation – drives the need to reconsider how we engage agents differently and holistically. It requires the next generation strategy with digital platform technology.
P&C Underwriting – 360 View
The continued growth in commercial and specialty insurance, growth in data sources and the need to look at insurance from a policy and portfolio base to assess risk appetite have intensified the need to reconsider digital age insurance. The small commercial market has shifted to a new digital business model, including direct processing and direct to SMEs by insurance companies such as Homesite or Next and through partnerships with companies such as Bold Penguin.
However, the middle to large / complex commercial and specialty market is next for digital transformation, for which the next generation guarantee is the key. In addition, this segment anticipates new risks and customer needs that drive the development of new products and services, which often requires a reconsideration of the traditional warranty process.
Together, this has made P&C one of the most volatile. and least consistent industries with loss ratios that, according to McKinsey, "vary by up to 28 points, while costs vary by only 2 to 4 points." [iii] Nevertheless, P&C insurance has the potential for much greater consistency. McKinsey has identified five building blocks for successful P&C guarantees. These include:
- Portfolio management
- Price security
- Risk selection
- Capacity optimization
- Coverage design
Four of these five (all except coverage design) can be improved by using digital technology that increases drawing consistency while they reduce the risk. Thinking about reinsurance using new digital technology, new data sources and advanced AI / ML analysis will define the next generation of market leaders.
Today, most insurance companies are dependent on policy systems and data that flow into the application or are accessed for further assessment – with a policy and an internal workflow thinking. The next generation of leaders not only skips their competition, they redefine the entire insurance strategy for a holistic view of 360 View between the insurer, the customer, the broker and the broader risk portfolio.
Key areas that redefine a 360 View for warranty include:
- Real-time data flows and are used by advanced AI / ML to provide intelligent insight.
- Underwriter, broker and customer all see the same information and can collaborate in real time.
- Underwriters focus on the knowledge and value they provide to the process rather than on the administration of the process.
- Both structured and unstructured data sources are available, integrated and used with advanced analysis.
- There is real-time access to premium and loss data, including review and all other transactions at all levels of the portfolio.
- There is full transparency and speed for the broker and the client.
Instead of the old terminology of an insurance workbench – which is unique and role-focused, an Underwriter 360 View provides an intuitive, intelligent instrument panel. The instrument panel contains a large range of components that provide a transparent and complete picture that meets all needs and expectations – insurers, brokers and customers.
Figure 3: Underwriter 360 – complete set of features on a single platform
360 is just the beginning
Looking at a 360 View is a bit like saying, “We improve our experience while improving our understanding. "It simply came to our notice then. However, the benefits of working against the 360 View method will give insurers so many more benefits that they wonder why they had not used it before. This shift goes to the core of what it means to be digital. Insurers will ask much bigger questions regarding the value of digital, for example:
- Can we also remove or discontinue existing systems and reduce our technical debt?
- Will this give us the opportunity to introduce real-time products?  Can we start innovating around modern channels, such as personal assistants like Siri and Alexa?
- Which parts of our business are really profitable?
- What networks and ecosystems do we now have access to?
Digital competence and a digital framework will, of course, reveal additional areas for streamlining processes and optimizing resources within the insurance organization. This is where new business models begin, with an understanding of how new methods can create a business effect. For a larger look at why now is the right time to move forward with digital initiatives, read Digital Insurance: The Inflection Point and watch the latest Majesco webinar, Customer360 – Create an Enriched Digital Customer Experience.
[i] LaReau, Jamie L., GM construction-shy strategy has tens of thousands of vehicles parked waiting for chip parts, Detroit Free Press, May 6, 2021.
[ii] Stevens, Pippa, The ship that blocked the Suez Canal may be free , but experts warn that supply chain impact could last for months, CNBC, March 29, 2021
[iii] Chester, Ari, Susanne Ebert, Steven Kauerer, Christie McNeill, From Art to Science: The Future of Insurance in Commercial Non-life Insurance, McKinsey , 12 February 2019