Insurance is vital, it’s time we treated it as such!
– article by Toby Yates

Insurance is vital to our lives and the ecoomey but ‘Keeping up” in insurance needs to give way to new ecosystem models that put the insurer back in front of the risk and resilience game. Not just paying out after the fact, but helping us navigate, understand and ultimately manage risk in our lives.

And let’s be clear: without insurance, much of modern life cannot function. The world has changed exponentially, and yet insurance often looks much the same. It is now faced with massively scaled and increasing risks — wildfires, floods, droughts and cyber threats — not to mention significantly shifting demographics and, of course, AI.

Insurers are also being pressed hard to improve customer outcomes by regulators, who are asking them to respond to ever-emerging risks. Yet many still see much of this as an obligation rather than the opportunity we believe it could be. We need insurance; it is undoubtedly vital, but it must adapt. Central government, local government and insurers need to work together now more than ever, to deliver better options and outcomes for customers. (see Mike Daley post)

How did we get to where we are today?

As insurance scaled in the IT era, it largely relied on administrative models to keep pace with massive customer growth and the proliferation of distribution channels.

In the next wave of significant investment in change — often referred to as “Digital Transformation” — many observed this process as necessary, but perhaps missing the opportunity to rethink insurance for a modern world. The focus largely remained on digital as a new channel, as opposed to a new business model. Perhaps framing transformation around enterprise outcomes may have led to more adaptive IT models and allowed a more evolutionary insurer to emerge:

1. Treating data as a perishable asset, constantly mining it for insight and acting on that insight in near real time.
2. Operating with a model more akin to an agile technology business — cross-functional teams working from deep human insight to build products and experiences in a continuous cycle.
3. Embedding risk, regulation and compliance within the technology and business model, rather than layering them on top — enabling adaptivity rather than hindering it.
4. Designing around a customer-centric architecture capable of orchestrating a proliferating ecosystem of integrations around customer value at pace.
5. Developing highly adaptive service models that allow plug-and-play capability — increasingly vital in the AI era.

How should we adapt to succeed?

Well, that’s a tough one to answer! What we do know is that insurers need to rethink how they define and deliver their propositions. We must stop industrialising what we do today and start asking what might be possible. That means posing the right questions:

• Embedded in our lives and assets, should insurance become far more about proactive risk mitigationand helping customers adapt to ever-changing circumstances?
• Rather than focusing solely on complaints management, could we design experiences that intelligently prevent complaintsin the first place, continuously optimising outcomes?
• Why should customers not be able to service all their insurance needs in one place, with seamless digital journeys and human intervention always available when required?
• Why can income protection not connect to banking data(via open banking) and dynamically adapt to income and cost pressures?
• Why is life insurance so often a “one-and-done” transaction? Surely, we can support customers across their health, wealth and protection needs — placing “life” at the centre of insuranceand ensuring it remains relevant beyond marriage, home ownership or later-life health concerns.
• Vehicles can now report usage in real time, including collisions and general wear and tear. Why is insurance not inherently built into the car to deliver a materially better service and claims experience? Better still, why not provide cover that adapts to multi-modal transport and evolving travel patterns?

For many of these questions, a new business model, or significant enterprise design change, will be required. However, we believe insurers can evolve towards this new architecture: one that unifies data around the customer and orchestrates outcomes through a technology services model capable of delivering increasingly intelligent products, services and experiences, developing value one outcome at a time.

This is why we believe ServiceNow is uniquely placed to help drive insurance forward. It is a vital industry. At Calitii (a Synechron company), we see these capabilities as uniquely aligned to insurance operations, powering new outcomes through better data orchestration, intelligent operations and data experience management, and evolving towards a new working model with risk, regulation and compliance designed in from the outset.