"Bionic companies seamlessly intertwine new technologies with human capabilities to deliver superior outcomes in experiences and relationships, more efficient and productive operations, and increased rates of innovation."
BCG November 2020
BCG has scored and rated 2,300 global company's Bionic Capabilities and insurance rates in the bottom tercile in all global regions.
This tallies with research from Altus ( UK only in this case) that shows hat most digital innovation by insurers has been focussed on the Quote & Bind aspect of insurance. When applied, for example, to Claims where the majority of an insurer's cashflow is swallowed progress to date has been mainly in the early FNOL stages rather than the roots up transformation of supply chains.
In "Home Claims Digital Maturity, three Digital Transformation use cases and choosing the right technology partners" I discuss this tactical rather than strategic deployment of innovation in depth. Visualised in the illustration below from the Altus DigitalBar
There are shining examples of the C-Suite and Managers tackling innovation- here are three for example.
Three recent digital claims announcements raised answers and questions about home insurance digital claims goals, strategy, innovation, transformation, and technology.
One a complete transformation of the whole claims process from eFNOL to settlement and the other two tackling specific aspects of claims. One strategic and two tactical.
First, the AA partnering with Synergy Cloud to develop and deploy a next-gen digital claims platform meeting not just its needs but those of all insurers, brokers and MGAs. Working back from the customer, including the needs of the repair, replacement and engineering supply chain and not forgetting the requirements of claims adjusters, fraud teams and inhouse specialists.
Second, AXA UK has rolled out a new machine learning tool to help streamline and accelerate complex property claims. BETSIE (Buildings Enhanced Triage Steering Intelligence Engine) increases the speed and accuracy of claims resolution by capturing essential data points and simplifying the claims triaging process.
The tool, which was built inhouse by AXA, uses data, analytics and machine learning to accelerate and improve decision making and triage management. This enhances customer experience as fewer questions need to be asked and the potential for rework, delays and further costs are reduced.
Third, Zurich cut property claims settlement times to under 24 hours with its latest state-of-the-art industry-first AI solution. During a pilot between December 2020 and February 2021, the technology created in collaboration with Sprout.ai delivered automated policy checking through the use of Natural Language Processing (NLP) and Knowledge Graphs to deliver a brand-new capability to the market, Automated Policy Checking.
Yet still insurers lag behind other industries according to BCG.
"The standard practice at traditional companies is to assign people to carry out processes, but bionic companies assign people to innovate and design processes that new digital technologies can handle more efficiently and productively. Getting to this point requires substantial investments in reskilling the internal workforce, attracting and retaining the right digital talent, and developing new leadership skills. It also means bold investments in technology to complement people, particularly data analytics and AI."
BCG describes four ley accelerators vital to raise digital maturity.
- Invest more than 15% OPEX in data and technology
- More than 15% people with digital profiles and roles
- Scale up digital from pilots to end-to end digital maturity
- New digital products to deliver more than 10% revenues
That digital profile should extend to the C-Suite and arguably insurance CEO's rise to the top from an engineering, software and digital innovation career.
There is no shortage of insurtech to provide the technology.
At last night's first Instech London live event for 18 months scaleups and startups explained how they are transforming insurance e.g.
FLOCK- Ed Clinger CEO is on a mission to make the world a safer, smarter place by reinventing commercial vehicle insurance from the ground up. Rather than simply insuring connected motor fleets and commercial drone operations, Flock aims to actively make them safer by providing customers with insights into their own operations, risks, and costs
CYBERCUBE - Oliver Brew Head of Client Success on data-driven analytics to quantify cyber risk. With data access and advanced multi-disciplinary analytics, the company’s cloud-based platform helps insurance organizations make better decisions when placing insurance, underwriting cyber risk and managing cyber risk aggregation.
GENASYS- Andre Symes co-CEP delivering an end-to-end insurance administration platform for UMAs, MGAs, brokers, insurers and administrators. It covers personal lines, commercial, niche and specialist products as well as life. The system includes a no-code product builder and back-end API solutions for insurtech companies. It has modules for quote and bind, policy administration, claims administration, documents, billing and premium collection, reinsurance and data warehousing.
SAFEHUB- Andy Thompson CEO on providing organisations with real-time, building-specific earthquake damage information to expedite emergency response and recovery. Through its cloud-based SafeHub platform, business continuity and resilience managers are able to prioritise building assessments and resources while resuming operations as quickly as possible.
In the US Nat Manning is CEO of a reinsurance startup- KETTLE that models wildfire risk. He says the industry is suffering because it outsourced its core underwriting capabilities during better, predictable times and is suffering in these unpredictable times. Reinsurers are raising rates by circa 30% and insurers just have to pay up.
KETTLE has created a better mousetrap. Its models run 696 billion risk assessments refreshed every fortnight to deliver a more accurate house-by-house risk assessment across the USA. The cover might cost three or four times more than older models but is far better than the eye -watering fees charged by rival reinsurers.
With so many technology partners available to help insurers rise up the BCG ratings and become bionic companies it is a challenge to find the right ones. Especially if insurers do not have the right vision, goals and strategies to apply the four digital accelerators mentioned above.
Just to provide a good starting point I include the summary from earlier articles.
Quote & Buy, MTA & Renewal Platforms like Go-Insur, HUGHUB, iptiQ that enable an insurer to allow a customer to interactively manage all their policies from one dashboard
• Digital Claims Platforms Synergy Cloud, RightIndem, Snapsheet, ClaimsGenius, Salesforce Industries, Five Sigma, 360Globalnet, Claims Technology etc
• Ecosystems CoreLogic, Verisk,
• Point Solutions Weathernet, Tractable, Audatex/Solera, Shift, Friss, Sprout.ai, Solera and many others
• Combined claims services and technology providers Crawford & Company, Sedgwick, Davies Group, Claims Consortium Group. Control€xpert etc.
• No-Code/Low-Code app building platforms from Unqork, Netcall…
• Embedded insurance Wrisk, Qover, etc
- Major core platforms Guidewire, Duck Creek leveraged by Adiona, Majesco, ICE, Pega, Innovation Group and so on. Good on breadth of functionality but sometimes lacking in specifics e.g. claim management. And traditionally involving Capex and high annual licensing costs though that is changing.
Not an exhaustive list but a good one.
According to our fourth annual Digital Acceleration Index (DAI), bionic companies accrue significant competitive benefits. The study—based on a survey of approximately 2,300 companies in Asia, Europe, and the US—found that bionic companies can scale their digital investments across the value chain better than nonbionic peers.