Member Article

Creating a Transparent Commercial Lines Customer Experience

These days, transparency is a key component of any positive customer experience, regardless of industry or channel. When it comes to the insurance customer experience, however, defining just what transparency means to each process stakeholder, including the customer, is not the only challenge. As it turns out, delivering it is even harder, due to constraints held in place by rigid processes, siloed technology solutions, and traditional roles within the insurance value chain itself. Perhaps it’s time for a change.

Get Your Inner Collaboration On In personal lines insurance, transparency is a top demand for end user customers who have been conditioned by personalized, point-of-sale (PoS) experiences in other industries, such as retail and banking. Personal lines insurers have, therefore, been forced to provide self-service opportunities and increased access to policy information which at least present the appearance of transparency. In commercial lines, however, transparency has been less of a priority as customers are typically further removed from the PoS, and more willing to simply accept a competitive price as long as it is accompanied by good service.

On the commercial lines side, collaboration between agency owners, brokers, risk managers, underwriters and other stakeholders in the process can help facilitate the needed and demanded transparency. Unfortunately, these players have very conventional or fixed roles to play and rigid processes to follow which almost naturally inhibit collaboration. As change and innovation continue to invade the insurance business, greater levels of transparency are achievable only if traditional roles start to shift and new or emerging technologies are allowed to enable smoother, more streamlined processes with tangible business benefits.

**Transforming Commercial Lines Distribution Channels ** According to a recent article by McKinsey’s Jonathan Godsall and Kia Javanmardian, “Navigating through Uncertainty in US Commercial Insurance Distribution,” transparency and technology are two factors driving changes in traditional distribution channels.

“Greater transparency on the cost of risk and more sophisticated internal risk management functions are raising the bar for carriers to deliver more sophisticated and personalized offerings,” note Godsall and Javanmardian. “Finally, large brokers, which already capture a significant portion of the total value in the industry, are gaining greater scale and building advanced capabilities. As these changes take hold, the lines between brokers and carriers—already somewhat porous—will begin to blur, with brokers taking on more risk consulting and carriers evaluating opportunities to bypass brokers and go direct to insureds, particularly in the small commercial segment.”

New entrants into the marketplace are ignoring traditional insurance distribution models. Instead, this new wave of competition is taking advantage of a greenfield IT environment to compete for business against those companies still married to outdated, siloed technologies which stymy collaboration and transparency at every turn. Incumbent commercial lines insurers must turn to technology today to compete effectively.

Bridging the M&A Gaps With organic growth and underwriting profits hard to come by in an unstable economic environment, smart insurers quickly turned to investment returns, and then fell back on mergers with, or acquisitions by, larger insurance companies to turn a profit.

In the M&A process, however, a veritable patchwork in terms of IT infrastructure has been created over the years, with little integration attempted or successfully completed. This means, for most insurers, the processes needed to provide better products, faster service and smarter pricing are siloed in outdated, outmoded core legacy systems, which do not “talk” to one another and which require IT specialists to write and modify software at a code level. And, even once the new code is written, nothing can be implemented without extensive testing to make certain no negative “domino effect” will occur in downstream systems.

The pervasiveness of information siloes and rigid legacy systems creates a troublesome situation that inhibits rapid response and, naturally, transparency. So, what is the solution in this day of fast-paced change and mobile lifestyles?

No More Siloed Technology The fairly recent introduction of low-code, rapid application development platforms is transformational, especially for commercial lines insurers faced with decisions about how to improve the customer experience and provide greater transparency and opportunities for collaboration. When combined with the powerful capabilities of a BPM solution, this type of modern, rapid application development platform can, for example, extend existing legacy systems, mask them from view, or complement them with additional functionality by providing the ability to quickly build interoperable apps for specific business case uses.

Low-code means this new technology is also infinitely accessible to business users, because coding is not needed for changes which are instead handled through intuitive user and design interfaces, and which eliminate the need for specialized IT training. The ideal application development platform allows a business user to become a true citizen developer, utilizing a simple design wizard to define the requirements for relevant apps, including processes, interfaces, data structures, and end users.

Additionally, by layering across existing system gaps, low-code, rapid application development platforms leveraging BPM create a network of applications which enhance collaboration and cooperation between process stakeholders, as well as simple information sharing and transparency.

End Game Moving to a low-code environment drives collaboration between insurance process stakeholders, and, it enables insurers to move from covering risk to avoiding risk. It also provides the opportunity for insurers to focus on greater specialization in terms of both product and service, another critical component of a positive, and transparent, customer experience.

Kate Gingras, J.D. is the global lead of Appian’s insurance practice. She can be reached for further information or comment via email at kate.gingras@appian.com.

This was posted in Bdaily's Members' News section by Kate Gingras, JD .