3. Current Environment
The insurance industry is confronting significant challenges –
pricing, diversified billing and payment options and real time self
service capabilities.
changing weather patterns leading to more intense weather
events, changing demographics, regulatory pressure and complex
challenge, given the economic situation and the competitive
How Organizations are Pursuing
Agility
landscape. Successful players are repositioning and reinventing
Carriers are pursuing agility to enable them to react quickly to the
their products, strategies and services. They are also taking
changes in the business environment described above. One of the
significant steps to position themselves for growth and profitability
biggest challenges carriers face is their dependence on archaic
in this competitive, lower-margin market.
and inflexible legacy systems. Adding new products or making
macroeconomic conditions. Organic growth continues to be a
changes to existing products can be a challenge when operating
on these rigid legacy systems. Meeting consumer expectations by
The Case for Agility
providing more self service capabilities online can be a challenge
Organizations are struggling to keep up with the various changes in
as well. Many carriers are in the process of transforming and
regulations while trying to innovate to keep up with a highly
modernizing their architecture in an effort to be more agile. Well
competitive market place using scant resources and shrinking
architected modern distributed systems provide the platform for
budgets. Carriers are attempting to leverage technology to create a
carriers to keep up with the changing business landscape.
platform that makes it easy to adapt to changes whether triggered by
regulations or a changing market landscape. A flexible modern
Policy Administration Systems (PAS): Many carriers have several
architecture will allow carriers to release new products and make
disparate PAS systems – both built in house and vendor based
changes to existing products quickly. Shifting demographics and
legacy solutions. Carriers are looking at consolidating these different
increased usage of mobile devices are transforming long standing
PAS systems on one distributed platform. In the interest of time to
distribution models. The buying behaviours, attitudes and preferences
market, most carriers are looking at distributed vendor solutions over
of customers are evolving. Carriers need to adapt to these changes
building their own solutions in-house. This means carriers need to be
and find ways to attract and retain these customers.
open to changing their business processes to adhere to the out of
box process flows. It is vital carriers do not over customize vendor
In an uncertain economic environment, there is increased pressure to
solutions as this will hamper agility. It will make future upgrades and
improve underwriting ratios. It is becoming even more crucial to
changes more complex. These PAS solutions allow underwriters to
assess risk accurately and provide the optimal price. Carriers realize
automate manual and paper based processes through the use of
they will have to leverage data to create predictive models that
sophisticated work flows. They also allow for real time quotes and
accurately assess risk and provide the best price. Carriers need to
instant conversion of quotes to policies.
identify new avenues for value creation while continuing to meet
opportunity for carriers to implement straight through processing
emerging regulatory changes such as Solvency II and IFRS.
with minimal underwriting referrals for simple lines of business – for
It is also an excellent
example personal automobile LOB. It also provides tools for better
Carriers are under pressure to reduce underwriting costs while
communication and tracking with the use of activities/diaries.
continuing to grow their customer base and keep up with changes
Carriers are also looking to implement predictive models that
in regulations without increasing head count. Customers and
provide a much more accurate assessment of risk than traditional
producers expect the ability to process quotes faster, competitive
rating algorithms.
3
4. These predictive models are created by sophisticated data
robin process of randomly allocating claims to claim adjusters within
analytical techniques that scrutinize the carrier’s book of business.
an area. This resulted in certain claims adjusters driving past certain
These predictive models are than implemented using modern rules
claimant addresses on their way to working on claims that were
engines and come up with a tier that represents the risk posed by
assigned to them. Usage of GIS information allowed this carrier to
the customer. This determines the pricing structure in conjunction
intelligently allocate claims taking into account the claim adjusters
with modernized rating algorithms. Carriers are now offering
current location. Usage of mobile claims apps that allowed claims
innovate usage based insurance product offerings. Technologies
adjusters to capture all the information including photographs using
like GIS, analytics, big data and telematics are used to provide a
one single device (for example a tablet), can bring about operational
different set of products that follow rating models that leverage real
efficiencies and eliminate the need for them to take physical notes
time driver behaviour and usage patterns and differ from traditional
that need to be than manually typed into the computer once they
rating processes – for example those that heavily weigh claims
are back at the office. Carriers are looking to use these flexible
history, violation history, etc.
claims system to enable their claim adjusters to focus on higher
value claim management activities with the automation of low-level
Claims Administration Systems (CAS): Most carriers are looking at
tasks and achieve quantifiable loss cost improvements through
their claims processes very closely for two reasons - ensuring the
consistent application of best practices reinforced via performance
best possible customer service is offered by providing a fair and
improvement support capabilities.
transparent claim handling experience and creation of efficient claims
processes that reduce the time and expense to service a claim. For
Billing Systems – Carriers are looking to modernize their billing solution
most carriers claims tend to be an area that is very manual and
with the intention of providing customers more options, letting them
paper based. Most carriers are focussed on implementing Claims
choose their payment schedule as well as how they receive and pay
Administration Systems that are based on modern distributed
their bills. These new billing solutions provide various forms of billing
architecture. These systems have built in work flow processes that
and payment options. These systems automate sophisticated billing
allow carriers to eliminate manual paper based processes.
processes with flexible workflow and business-rule driven control.
Digitalization with the usage of modern document management
These modern billing solutions help identify uncollected earned
systems allows carriers to archive these claims files and provide a
premium to reduce billing leakage, combine invoices to reduce costs,
much better mechanism for disaster recovery than the traditional
and leverage equity-based billing to avoid unpaid coverage. They also
paper based approach. It also provides claim adjusters with the
provide the customers with the “green” option of paperless delivery
mechanism to view prior claim documents and images easily during
which results in huge cost savings for the carrier.
the claim handling process. In one instance, a claims adjuster for a
particular carrier noticed that the roof damage photos submitted for
For most carriers this transformation will be a multi-phase initiative,
the claim were the same as the ones the insured had submitted the
with each phase taking between 9 to 18 months. While the carries
previous year. Technology can be used to prevent fraudulent claims
go through the complex transformations illustrated above, it is vital
like these while at the same time offering better service to customers
they leverage Enterprise Architecture best practices and create a
by processing genuine claims quickly and transparently. Customers
future state IT roadmap that aligns with their business goals and
can also view the current status of their claims online through the
priorities. Defining the architecture that depicts how the integration
carrier’s portal or mobile claims app. The system can also be
between different systems will be accomplished and also
designed to send notifications to customers alerting them about
addresses security and physical infrastructure upfront will reduce
changes during the claims process. The entire FNOL process and
the risk of delivery and also ensure the systems built will be flexible
claims allocation process can be streamlined with the application of
and agile to meet the ever changing needs of the business.
technology. For example, a particular carrier was following a round
4
5. About the Author
Roopesh Poojary is the Practice lead in the Insurance vertical at NIIT Technologies. He has over
17 years of leadership experience in IT Delivery, Enterprise Architecture, Program Management,
Process Improvement and Services Management. With 12 years of experience in the insurance
domain, he has successfully led several large core system transformation/replacement
programs. Rupesh has done his Master’s in Business Administration and Finance from Indiana
University in addition to a Bachelor’s Degree in Engineering.”
About NIIT Technologies
NIIT Technologies is a leading IT solutions organization, servicing customers in North America,
Europe, Asia and Australia. It offers services in Application Development and Maintenance,
Enterprise Solutions including Managed Services and Business Process Outsourcing to
organizations in the Financial Services, Travel & Transportation, Manufacturing/Distribution, and
Government sectors. With employees over 8,000 professionals, NIIT Technologies follows global
standards of software development processes.
Over the years the Company has forged extremely rewarding relationships with global majors, a
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