Personal lines carriers have been through tremendous upheaval in the last two years. The pandemic forced many carriers to return premium and implement new digital processes as the country went into shutdown. 2021 brought a different set of challenges. Exploding housing and auto markets dramatically increased exposures while supply chain issues and resource shortages fueled rising loss costs.
Coupled with continued weather impacts from floods, wildfires, windstorms, and hurricanes, carriers are responding to the new normal of disruptive change in different ways. Carriers with resilient workforces and flexible technology platforms have begun to accept that product, pricing, and operational changes are required to stay ahead of the pack.
Flexibility is key in the volatile market, and technology plays a big role in achieving a speed-to-market advantage. Technology platforms that enable frequent releases allow carriers to modify products and processes more easily. Robust API frameworks help carriers integrate with digital capabilities for distribution partners. Third-party analytic insights delivered via APIs are helping underwriting organizations price risk more effectively. Claims organizations are also benefiting from analytics to identify severity and subrogation early on to mitigate loss costs.
Aite-Novarica Group recently announced our annual case study compendium for innovation in core, data, digital, and IT practices. Not surprisingly, cloud computing is the foundation of many carriers’ speed-to-value reality. Carriers who have implemented cloud as a strategic advantage vs. an infrastructure replacement are steps ahead of their competitors.
As an example, Kemper implemented an open-API distribution platform directly integrated with quoting and binding capabilities. Developed in 10 months, the platform has cut integration effort from 2,000 hours/partner to 250, cut maintenance costs, reduced required staffing from 10 to four, and integrated more than 10 partners in a calendar year. It runs on AWS and is built using cloud-native tools.
Another carrier, Risk Placement Services (RPS), implemented a comparative rater for its personal lines business to digitize underwriting and distribution and improve UX. The company onboarded its first insurer in six months. The system increased workflow efficiency by 30% to 35% and is expected to generate 25% to 35% growth over three years. The core technology runs on Azure and leverages API services from Cogitate.
Cloud analytics enabled State Auto to create a machine-learning-enabled, configurable voice analytics solution to increase customer self-service and to reduce adjuster workload. The new solution diverted 10% of the call volume to an IVR system, while the adjuster call analysis allowed claims service staff to handle 3% to 5% of calls. The cloud-native, serverless call insights solution was deployed on AWS.
These are all great example of carriers leveraging cloud to achieve speed to value while navigating the turbulent waters of personal lines insurance. I’d be happy to share further insights and case studies. To continue the conversation, please reach out to me at [email protected].