Seek to Improve, Rather Than Replace the Human Experience

Jul 08, 2019

In the insurance industry there is at times a nagging and negative perspective that the next hot technology startup, backed by some mega-dollar venture capitalist, is hellbent on removing people from the operational equation. 

But when we look at the landscape of recent insurtech innovations that have proven to create value, we uncover that the evolution taking place is far more inspiring. With each implementation of new digital tools that eliminate superfluous tasks and improve the speed of communication, we find underwriters, agents and insureds able to more effectively and efficiently interact with one another. 

The endless road we call “innovation” requires a strong sense of the human purpose behind each idea and a practical approach on how to deliver a better future, one step at a time.

Listen Before You Speak

The magic behind great technology is first discovered through an evolution of ideas. These ideas inform a vision and, for all successful products, no matter how technical or non-technical in nature, that vision shares a common thread - it understands the human need.

This understanding is not derived through special knowledge; it comes from listening and paying attention to what people want. What are they asking for?

Glatfelter Program Managers, for instance, is extremely committed to listening to employees’ ideas on improving the business and has gone to great lengths to build an infrastructure that encourages brainstorming. President of Glatfelter Program Managers, Art Seifert, shared, “We created an innovation group comprised of six non-management, non-supervisory people, all of whom showed a passion by applying for these six spots. We then throw out an area where we need ideas on improvement and tell employees that we’re taking submissions on our innovation website for the next three days. This creates a sense of urgency across the team. The innovation group reviews the submissions and forwards the best ideas to a senior level committee that will hear presentations and decide which ideas get funding.”

Whether an insurance company feels ready to adopt such a formal process or not, the critical takeaway is to realize that innovation starts by understanding the day-to-day needs of your business. This is the foundation from which great, simple ideas come.

"When team members across disciplines work together to concentrate on simple iterations, even the most profound vision can become a reality."

From Vision to Reality

In order to deliver on a shared vision, teams must be precise in driving toward their common goal. 

That precision depends on setting milestones that break the journey into manageable sprints. As Art stressed, “In order to be successful, what we’ve discovered is that it’s an incremental process. People can get caught up in the vision, which is often more interesting, but you still have to find a pathway to that vision.”  By establishing more manageable expectations and checkpoints along the way, leaders in insurance are able to bridge the ideation gap between operations and technology team members.

Once an idea has gained traction, a collaborative planning process must guide and document how it should be implemented into a product that people will use. As Art described, “Our advantage is that we have I.T. folks planning side-by-side with underwriters, marketing, sales and operations to understand our process and because of that they can be practical in their application of any technology.” When team members across disciplines work together to concentrate on simple iterations, even the most profound vision can become a reality. 

"By sitting across the table from people on a regular basis we can make insureds smarter and better decision makers..."

The Driving Innovation in Insurance

Insurance has become a hotbed for innovation, and the number of companies trying to address how to improve the industry is at a fever pitch. Among this sea of experimentation and change are tools that drive at the ease of doing business between agents and underwriters. These digital policy management, placement and underwriting tools are among the most pragmatic and useful technologies popping up in the industry. 

“The key technology on the distribution side is to make it as easy as possible for an agent to do business without impugning the integrity of the underwriting results,” stressed Art. “The one thing you can’t buy is more time. So if we can take a twenty-page application and reduce it to the ten really critical questions that provide an underwriter with a basis for underwriting the account, we’re delivering tremendous value for everyone involved.”

This level of automation has stirred some fears within the agent and underwriter communities. That said, the prevailing expectation among insurance executives is one of optimism and opportunity. Art hammered home, “The independent agent will not be disintermediated in any kind of significant way. Business owners in particular will still want to have an agent as an adviser in the process of buying insurance, and if anything, the tools being created today will afford agents more time to be better consultants for their clients.”

As for underwriters, the stage is equally set to eliminate redundant effort and increase their focus on more interesting and complex risks. “With straight through technology do you really need an assistant to dig into a twenty-year account that’s never had a loss? No you don’t,” said Art. “The day might be coming when it won’t be necessary to process small business by hand and that means more time for sophisticated underwriting to handle the exceptional cases and larger accounts.” 

Insurance carriers, MGAs and brokers have all shown a commitment to digitizing their workflows, and many have made massive strides. From integrating vast amounts of third-party data, to assisted rating and automated document generation, the role of human beings in the insurance industry is being elevated away from routine manual processing. In the wake of these advancements is a chance for agents and underwriters to spend more time building stronger relationships with one another, which will deliver greater value in the end to the insured.

"technology...doesn’t take the place of relationships, but allows for more time to have better relationships."

Going Mobile

The next important wave of innovation in the insurance industry is to ensure that these digital tools are compatible on a mobile device. When agents can spend more time outside of their office interacting with prospects and working alongside their clients, the entire insurance value chain wins. 

Art is confident that “The next step is for everything to be mobile because it’s a great help to insurance agents when they don’t have to be tied to a desk. By sitting across the table from people on a regular basis we can make insureds smarter and better decision makers, which ultimately creates better insurance results in the long run.” 

The mobility of these tools must also extend to the communication and back-and-forth between agents and underwriters. It’s of no use to provide a quick indication or a bindable quote, only to find out after the fact that there was confusion with a critical question on the application. Instead, when agents need underwriting support, mobile technologies are being built to provide them with more immediate access to the right answer.

“Making the application easier to complete is one step, but the second step is to make both underwriting and sales people readily available,” said Art. “You have to ask yourself, if an agent has a question that’s preventing them from getting a quote, how fast can they lob that question over to the carrier or MGA and get a response?” When the answer to a question like that is either “I don’t know” or “when we get to it”, business is inevitably lost.

Embracing Change

At its best, buying insurance is an engaging and insightful process guided by experienced agents and underwriters. When at its worst, it’s a laundry list of mundane questions dropped on an insured with little personal or face-to-face support. Thankfully digital platforms are automating the redundant, while mobile technologies are untethering agents so they can get in front of their clients, building stronger relationships and confidence in the purchase process.

As Art summarized, “The momentum of technology and its current corrosive impact on relationships is going to come to roost. There is going to be a backlash and it’s going to swing the other way. So I see technology as a tool that more and more is being used productively by human beings to be more effective in how we engage one another. It doesn’t take the place of relationships, but allows for more time to have better relationships.”

Written by Michael Fiedel, partner and VP of Business Development, PolicyFly.