IBC: Insurtech funding bounced back in the second half of 2020 after a rough start to the year. Where does the landscape sit now, and what are the key developments in the space?
Taylor Rhodes: While insurtech funding was low for the first half of 2020 due to a variety of reasons, with the pandemic as a major one, the second half of 2020 and the beginning of 2021 have shown that investors are becoming more confident again. Now that businesses have put their business continuity plans in place and are operating in the new normal, investors see that the insurance market is ripe for opportunity. As more people work remotely and need digital technology to connect to their organizations and their customers, the appetite to invest in technology rises.
Remote work has only exacerbated the traditional paper-laden workflows of broker-insurer-insured distribution. Brokers running paperless operations thrived, while others looked to quickly leverage connectivity and self-service to ensure their brand was at the forefront of the end customer experiences.
IBC: In what other ways has the mass shift to remote work impacted the insurtech landscape?
TR: Remote working has accelerated digital transformation for the entire industry, especially insurers. Insurers have looked to insurtechs to fuel their innovation and accelerate efforts to modernize technology infrastructure, improve data capabilities, and create digital experiences for their employees, brokerage partners and end customers.
Brokers, too, have fast-tracked their digital strategies to adopt technology that will enable better connectivity throughout their organization, such as hosting their business in the cloud. As customers were no longer able to meet with their brokers in person and digital-first interactions became a mainstay, brokers turned to insurtech to create digital customer experiences to better serve their policyholders.
According to KPMG, the insurtechs in the ‘enabler’ category – those that provide B2B point solutions that are designed to improve an aspect of an insurer’s or broker’s value chain, such as data algorithms or mobile apps – stand to win if they closely align with current priorities. An insurtech like Indio is a good example of an enabler insurtech that saw a need in the market – to digitize a traditionally paper-laden manual task like application management and submission – and found success through acquisition.
Another type of insurtech laid out by KPMG that is expected to do well thanks to remote working is the ‘partner’ insurtech – those that typically go to market together with traditional insurers. As insurers are investing heavily in their digital transformations to enable a more connected experience for their employees, brokerage partners and policyholders, partner insurtechs that are focused on accelerating digital transformation efforts will be successful.
IBC: How can technology help insurers compete in terms of the digital experiences they offer customers? What operational priorities should insurers be turning to insurtechs for?
TR: The pandemic has accelerated insurers’ digital strategies and directed their attention to insurtechs for support. Insurers are beginning to work with software houses on connectivity through data standards in the commercial space.
Historically, commercial lines distribution methods have been extremely manual and time-consuming for both insurers and brokers, requiring back-and-forth communications to complete and submit applications and then requiring the broker to potentially wait weeks to receive a quote. Applied is working with insurers, broker partners and CSIO to create more effective and efficient transactional and operational workflows for all stakeholders.
Think of the time lost, the E&O poten-tial. When data is not captured properly or stuck in the spot where it’s captured, it’s not just time lost – it causes friction among brokers, underwriters and customers. Using standardized data and workflows creates a quoting experience that is consistent across all insurers to increase the ease of doing business and creates new business opportunities for both brokers and insurers in commercial lines.
IBC: How can brokers use insurtech to their advantage? Are there any key solutions they should know about?
TR: Brokers are beginning to take advantage of those insurtechs that are designed to work with brokers to make their business processes more effective.
It’s important to make sure brokers are working with a management system that is open and able to quickly integrate with third-party applications. The days of closed systems are coming to an end, and technology must become more open and integrable, creating flexibility for brokers to harness its power to support their business as it evolves and changes over time. Software built on componentized architecture with open APIs creates simple ways to integrate the management system with other critical business applications and quickly get information in and out of the system of record.
Indio is an example of an insurtech for brokers with commercial lines business that enables more effective and efficient work-flows. Instead of having to pull specific applications and supplemental forms from each insurer and then send them over to the customer to fill out, brokers can use Indio to digitally collaborate with customers to fill out a single online form.
Indio uses information stored in Applied Policy Works to auto-populate the digitized insurer form. Then the broker collab-orates with the insured through a digitized form. The structured data is submitted to the insurer through Applied Policy Works, and the underwriter can begin the quoting process faster based on standardized data flowing through the entire transaction. This automated commercial lines process shortens the typical data-gathering and submission time from two weeks to mere minutes, freeing up brokers to service customers and delivering a premier digital customer experience.
IBC: Many believe that insurance has shifted toward an innovation-focused digital culture. In what areas does it still need to improve?
TR: A shift in customer experience demands, brought on by large digital-first companies like Amazon and Uber, has driven insurtechs to transform how brokers serve their customers in claims. Using technologies like machine learning and artificial intelligence, insurtechs have redefined what is possible in placing and tracking claims.
For example, Applied has collaborated with Google to create an artificial intelligence-powered chatbot, allowing policyholders to walk through a series of simple questions to answer. This is simulated to the customer as a chat message with a virtual claims assistant, ensuring that all necessary information and photos are stored within the management system and then sent to begin the claim.
This allows the customer to start a claim at any time of the day, without having to call and wait for their broker to help. Not only does this strengthen the broker/customer relationship, it also saves time by shifting interactions that have been historically facilitated by brokerage employees to self-service. Because of these efficiency gains, customer self-service often delivers a return on investment in less than one year.
Taylor Rhodes, CEO
APPLIED SYSTEMS
Year founded: 1983
Headquarters: University Park, IL Leadership: Taylor Rhodes, CEO
Taylor Rhodes: Applied Systems isa leading global provider of software that powers the business of insurance. Recognized as a pioneer in insurance automation, Applied is the world’s largest provider of brokerage management systems and a leader in data exchange, seamlessly connecting the insured, brokerage and carrier stakeholders. Automating the insurance life cycle for more than 187,000 brokerage users of our software and more than 430 insurers worldwide, Applied enables millions of people to safeguard what matters most.
TR: Applied enables greater access to information and streamlines workflows, allowing our customers to better connect within their business, to their insurer partners and their customers. Applied’s place in the insurance ecosystem lies in equipping and enabling the independent brokerage channel by delivering integrated automation from the back office to the front office.
We empower brokers to break out of the broken processes and poor customer experiences to create simple online interactions – from application to policy binding to servicing and renewals. We expand intelligent connectivity across the insurance ecosystem to help brokerages and insurers perform better together, all while providing intelligence that helps brokers and insurers grow their business more efficiently by turning data into actionable insights. Our focus and commitment is to invest and push forward to make the digital future of insurance practically helpful for the entire ecosystem and ultimately the end insured.
TR: The insurance industry is riddled with paper-driven manual processes, often creating inefficient workflows and poor customer experiences. These challenges start in the internal operations of the independent brokerage, including back-office processes such as policy administration, accounting and connectivity to manage customer relationships.
When digital technology isn’t used, brokers are challenged in providing consumers with policy details in a secure manner. Consumers are accustomedto accessing portals in banking and other industries and expect a consistent experience from their brokerage. When brokers are unable to carry their brand through the service process, they risk disintermediation, particularly when customers are working remotely. to reshape their business with four core focuses: lead generation tools to drive new business, a foundational management system to automate and streamline operations, deep integrations to maximize commercial lines processes and seamlessly flow critical policy information, and omnichannel customer service through a brokerage-branded customer portal and mobile app.
TR: Applied technology automates the exchange of information and data throughout the insurance life cycle among brokers, insurers and consumers, delivering a connected experience between all participants in the insurance ecosystem. This means greater connectivity with insurer partners and greater connectivity to the insured. When the business of insurance is digitally connected, all stakeholders benefit from superior experiences, such as operational efficiency and better customer service, across the entire insurance life cycle.
TR: We have many initiatives and innovations to be excited for in the future. One in particular is the extension of commercial lines connectivity infrastructure at Applied. Fixing this for our industry is one of our top priorities because in its current state, the end-to-end commercial lines value chain is too expensive, takes too much time, and leads to frustrated and dissatisfied brokers and customers.
Collaboration with CSIO and insurer partners to standardize and automate commonly transacted SME business will have huge advantages for all stakeholders in the ecosystem. With insurers aligned on data elements, our capabilities to deliver real-time commercial lines quoting and binding can be efficiently leveraged, bringing efficiencies to the brokerage and, most importantly, improving the experience for insureds.
