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Uberization of Insurance Industry!


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In recent times, start-ups and disruptive technologies/innovations have set a mandate for all the industries to have a hawk-eye on the market trends and its impact. The veteran and the notable Fortune 500 groups are given tough times by the mushrooming tech giants. Companies can no longer take a back seat and relax.

It is good to be wise and be proud of the experiences & achievements in the past, but most importantly be vigilant of the present and have a defined vision of the future to sustain! and have existence

The technology adoption and re-incarnation of business strategy/priorities to serve the customers will definitely play a crucial role in the Insurance Company’s journey in making it stand tall and strong in the crowd (as a differentiator).

Following are a few highlights of the “Disruptive Trends” the Insurance Industry is trying to adopt for improved Customer Experience[Cx] and reducing Operational Expenditure[OpEx]:

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  • Rise of InsurTech
    • Similar to FinTech organizations, there has been a rise of InsurTech start-ups [leveraging latest technology and innovation] trying to replace or enhance the usage of insurance services of incumbent companies.
    • InsurTech solutions bring in an incremental or radical / disruptive innovation development of applications, processes, products or business models in the insurance services industry
    • It gives the firms a mix of – Trust built over the years by Insurance Companies & Differentiated experience by newGen Start-ups
    • Enables development of Faster Go-To-Market (GTM) solutions than developing age-old legacy systems and maintaining it over time (costly affair)
    • Alliance accelerates change and transforms the way to think, develop and satisfy the needs of the customers – will foster more collaborations in the futue
  • Making Big Data Actionable
    • “Data” is a powerful currency in the race for fintech supremacy.
    • In addition to gathering data, making sense and actionable items out of the data heap by leveraging contextual data analytics, intelligence, big data will make a difference for the customers and the financial institution as a whole.
    • With enormous data in store, data lake kind of concepts can be adopted and harnessed to reap better benefits
    • Machine learning capabilities can be topped-up with the real-time analytics to form the icing on the cake and help in making human-like decisions
  • Virtual Assistants Chat Bots or Robo Advisors:
    • It is crucial to understand the customer and suggest products for cross sell/up-sell – based on adaptive(real-time) & predictive(historical) analytics on the transaction/similar transactions for prospective customers
    • It is like providing the right product, to the right customer at the right point in time
    • g.: similar to Apple’s Siri; Google Now; Amazon’s Echo
  • Robotics Process Automation[RPA] / Smart Process Automation[SPA]
    • Leveraging RPA / SPA solutions to build Workforce Productivity Solutions [ around areas where there a monotonous, mundane and manual intensive tasks are involved]
    • Typical scenarios are: data entry; head-down worker activities; reconciliation process; on-boarding new customers; sending notification/intimation
    • This helps in reducing the operational expenditure of the organization and improve the workforce productivity
  • Blockchain Technology
    • Blockchain technology provides a shared, trusted and secure public ledger to record financial transactions / digital assets and ‘smart contracts’.
    • These are recorded independently – distributed across a multitude of computers around the world.
    • The records are condensed (into blocks) and interlinked (to form chains), using complex cryptographic algorithms.
    • There is no third party required for secured transaction
    • The verification of data for primary applicant or reinsurance can be validated by leveraging block chain technology model – this will reduce the complexity and tedious ledger process
    • Automated smart contracts can help in quick validation of identity and limited bureaucracy
    • Peer-to-Peer Insurance models or Smart Policies can be envisaged[ based on data feed for climatic conditions by Meteorological Dept. pay-outs can be done or initiated for crop/agricultural insurance]
    • Key areas where it can be leveraged in Insurance sector:
      • Smart Contracts
      • Customer Identity Validation / Verification
      • Regulatory and Compliance Benefits [Audit]
      • Smart Underwriting
      • Fraud Management
  • Digital Data as a Service [Microservice based model – functional segregation of business]
    • Leveraging the Microservices ways of working / implementation to expose some common functionalities and processess as a service
    • Few services for example: getting insurance details, capturing policy details, policy payment etc.
    • A standard API layer with a SOAP/REST protocol can be can be leveraged to access the functionality from multiple devices / external or other legacy systems
    • With this approach – the concentration and focus can only be on the Business Functionality – than building the same functionality for multiple applications / customizing or maintaining it.
    • This will help in avoiding development of monolithic application
    • It will also give rise to new breed of providers offering data on a subscription model
  • Mobility
    • Mobility or omni channel experience has already been adopted by some of the major insurance companies
    • More personalized and advanced features with a good customer experience will make a difference
    • Mobile Health Apps to gather data from the customer and monitor the health – thereby reducing the spending on healthcare and importantly enable insurance companies to understand the customer’s risk profile
  • Omni-Channel & Opti-Channel Delivery
    • An ‘opti-channel’ experience delivers solutions using the best (optimum) channel based on the customer’s need and preferred channel
    • This delivery model is beyond multichannel (delivery on multiple platforms), or Omni channel (delivery through all channels similarly)
    • The proliferation of channels will begin to consolidate and improve in efficiencies
    • Designing of “Digital Persona” is a key component
    • This helps in targeting right customer, at the right time, with the right offer via the right/preferred channel
  • Driverless Car [defining new policies]
    • With the driverless cars hitting the road – definitely the insurance policy model needs to be revisited [as there will be no human driving it – to claim whose fault]
    • Variation based on regional regulatory and compliance will add other dimensions
    • For eg: things like black-box in the car similar to ones used in aircrafts can make a difference
    • There will be incremental changes to the policies based on the adoption and faith the human race gains over machines
  • IoT [eg: Wearables, Devices]
    • The Internet of Things’ is becoming a buzzword and the technology trend with repercussions across the business spectrum
    • It opens up a new world of opportunities by connecting the internet with billions of devices – wearable gadgets, fancy vehicles, fitness gadgets or industrial equipment
    • Sensors, Beacons, Wearables and Devices etc generate humongous amount of data which can be leveraged, aggregated and analyzed by financial institutions to improve operational performance, customer experience, and product pricing
    • The dump of data gathered from these devices on a daily basis can be instrumental in defining new services, improve efficiency or achieve other health and safety benefits
    • We hear a lot about Smart Home, Fitness Trackers etc. IoT kind of models can be leveraged to optimize and provide customer specific service [house insurance, vehicle insurance or personal health insurance]
    • And importantly, with data in hand the Insurance Providers can either help or challenge the customers [eg: in healthcare industry with fitness gadgets]
    • With advantages that can be reaped from the data are also associated security, privacy & risk concerns areas
  • Leveraging Advanced Machine Learning & Artificial Intelligence
    • Machine-based learning is described as the science of getting computers to act without rules-based programming
    • Cognitive computing capabilities and development of algorithms that team themselves [self-healing processes] are an integral part leveraging Machine Learning
    • The data gathered via IoT [structured + unstructured] can be put to use by crafting ML[Machine Learning] algorithms
    • Natural Language Processing – NLP can also be leveraged for providing a more customized / personalized experience
    • The Data & Algorithms can help in defining the Digital Persona of the customer
  • New Payment Models
    • With the ease of regulations, we are back in the era of Money Virtualization
    • Every section of the industry food, travel, ecommerce etc. have come up with the Mobile Wallet features – making life easy for the customer to move without carrying cash/coins/cards
    • Customers demand powerful services to be delivered at the swipe of a smartphone screen, wherever and whenever they happen to be. As it is delivered in the more efficient way – it is getting easier for them to step over the inertia of the traditional banks
    • As many players are entering this space – there is a race for dominance. Insurance Companies can’t walk solo with their offerings, collaborative partnership with mushrooming mobile wallets is the key
    • This will help them to : enter competitive market space; save cost; ease of operation; customer demand
  • Contact Centre Modernization
    • Customer Experience
      • Customers are dissatisfied with their customer service experiences
    • Better Service
      • Providers struggle with critical service and support capability gaps (e.g.: Mobility, outbound emails, personalization etc.)
    • Futuristic Platform
      • A new generation of “social” customers is setting the agenda for contact centers of the future.
    • Competitive Market
      • Organizations are taking the first steps toward building next-generation customer management platforms
  • Usage based Insurance Models [PAYD, PHYD]
    • Auto insurers are shifting towards usage-based insurance models that will help them to enhance claims handling capabilities and perform better customer segmentation
    • The insurance premium will be calculated based on usage and/or behaviour
    • Vehicle Telematics [in car installed devices for sending data at real time] will be leveraged to estimate the usage, driving pattern and driving behaviour
    • Some of the models can be;
      • PAYD – Pay as You Drive – Insurance premium is calculated based on the number of kilometres/miles coved by the vehicle
      • PHYD – Pay how You Drive – Insurance premium is defined based on the driving pattern/style
  • Gamification
    • Games are a great way to engage the customers across all age groups
    • Insurance companies are adopting gamification to simplify the complex and tedious processes – this in turn enhances the Customer Experience, training and adoption
    • Gamification uses strategies like points, challenges, leaders board, incentives and different levels of engagement
    • It is an integral part of the insurer marketing campaign
  • Use of Aerial & Digital Imagery
    • Insurers have started using aerial and digital imagery for accessing the property and other relevant details
    • This helps in reducing the claims processing time
    • Eg.: for a house insurance – aerial and digital imagery can help in getting the exact dimension details, location, proximity to identified risks [if any] – e.g.: seismic zone for earth quakes
    • Very helpful for remote locations and primarily for Agriculture based Insurance [for farmers] – Unmanned Aerial Vehicles – UAV [Drones] can be leveraged
    • There may be regulatory and compliance challenges which needs to be addressed in case of Drones [to avoid infringement related issues]
  • Patient Adherence Apps or Patient Care Monitor
    • Non adherence to routine medicine intake or timely check-up might lead to increased healthcare spending for the Customer and at times also hits back to the insurance companies
    • With Apps for Care Monitor the patient’s adherence towards medication will improve
    • These apps regularly follow-up with the patients for medication, treatment and check-up via games and reminders
    • The objective of these apps is to: remind; follow-up; educate; simplify; counsel; reinforce
    • The data gathered will be helpful to provide incentives to patients who follow medication regularly and on a timely basis.
  • Establishment of “Insurance Innovation Labs”
    • The marriage between the traditional insurance and new age start-ups give rise to insurtech “innovation labs” or “digital factory”
    • Innovation Labs envision an evolutionary process that re-examine the original purpose of the business (institution) before altering the DNA to redefine the purpose to go beyond the original intent.
    • This establishment creates an open space to research, develop and showcase creativity and connect with the customers in enhancing the experience
    • This develops a curiosity factor and an experimental approach with the vision of embarking on the digital journey
    • The labs can be used to define new opportunities and to test the hypothesis
    • It also creates a platform to engage customers with technology / business related discussions, different from the routine transaction related activities
    • Insurance Innovation Labs can help in defining:
      • Strategic / business thinking – with a focus on business and brand
      • Design thinking – product or service creation
      • Agile – technological design
      • Human / Customer centred design – interface, environment, product design
  • Virtual & Augmented Reality[AR]
    • The year 2016 was remarkable in terms of the excitement, craze and the impact Virtual & Augmented Reality can bring for any business model [How can we forget Pokemon Go]
    • Augmented Reality is a technology that generates sound, video or graphics over real world environment and thereby enhancing the people’s experience.
    • Customers are tired of the same marketing models and customer service [ via Contact center call or printed/scanned flyers and brochures]
    • VR/AR will be a new space to excite the customers and help them understand the policies/products better
    • Customers no longer have to browse through multiple links; flip through multiple pages of the attachments; presume something or spend time in calculating the premium and selecting the right product
    • Augmented reality has the potential to bring a paradigm shift in the insurance sector and many of the advanced-thinkers had already started adopting the technology as a major marketing tool.
  • Others Trends to watch-out and Adopt
    • Leverage Telematics in vehicles to gather data and communicate at real-time
    • Connected Health – Stitching the data from wearable and other fitness devices to analyse and recommend the best policy for an individual
    • Providing Next-Gen Customer Experience
    • Developing Customer Centric Applications (primarily self service enabled – eg: Kiosk)
    • Welcome & Leverage Open Source Stacks (OSS)
    • Crowd Sourcing Initiatives
    • Improvise efficiency and reduce operational expenditure by adopting DevOps

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Interesting Read Articles & References:

Keep Reading, Keep Researching & Keep Blogging!!

Please do share your thoughts and views to enrich it!

Happy Reading! 🙂

Disclaimer: Views my OWN not my Employer’s

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[The intent of using the images was to pictorially share the thoughts and share the learning. Happy to share Credits for the photos and images]

Related posts: [old blogs]

Uberization Of Retail Banking


  • The Banking & the Financial services industry is the widely and wildly conquered sector where digitization and automation has been enabled to the max by IT.
  • But in recent times, with the advancement of technology and innovations, it is important for the Banking industry to explore, pace up, transform, innovate, re-think and live in the present.
  • The technology adoption and re-incarnation of business strategy/priorities to serve the customers will definitely play a crucial role in the Bank’s journey in making it stand tall and strong in the crowd (as a differentiator).

Keep Reading, Keep Researching & Keep Blogging!!

Happy Learning!! 🙂

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