3 Insurtech Operations Trends You Need To Know About in 2023
Lemonade. Cuvva. Knip. Kasko.
Just a few years ago, these names wouldn’t have been recognizable.
But in 2023, they’re some of the best-known, rising stars in insurtech, the latest financial “boom” industry to take-off at rocket velocity. Insurtech’s rapid-rise has caught the attention of everyone – from tech entrepreneurs, to traditional insurance giants, to consumers – and it’s forecasted to reach a global market valuation of 236 billion USD by 2026.
What’s unique about insurtech?
In a nutshell, insurtech encompasses the disruptive products and technologies offering digital alternatives to the “traditional ways” of the insurance industry. Insurance has long lacked innovation, so emerging technology has high potential to positively impact the industry, for consumers and providers alike.
Customers – as in other post-digital industries – have grown to expect insurance services to be delivered as conveniently and quickly as possible. Customer satisfaction is paramount.
Meanwhile, providers who have digitized essential processes end-to-end (quotes, claims, risk assessments) benefit from increased operational efficiency, superior customer experience, and reduced costs. The rapid transition to digital, however, doesn’t come without a few significant hurdles on the track.
The operational challenges facing insurtech companies
Emerging insurance technology companies, like fintech companies broadly, face long-standing operational risks: legal and regulatory frameworks, large institutional competitors, a fierce partnership landscape, and increasing expectations from customers, among others.
Operations teams and other, core operational business units are central to the success (or failure) of insurtech companies. It’s these teams, the efficiency of their processes and workflows, and the technologies they employ to support them that will steer insurtech businesses through this hyper-growth and rapidly-evolving market.
Here are the top tech trends operations leaders say insurtech businesses should be leveraging in 2023:
1. Business Process and Workflow Automation
With rules-based business process and workflow automation tools, insurtech teams can optimize multiple dimensions of the “global” insurance process – vital internal processes like risk assessment, compliance, client services, and claims processing. Automating process management and streamlining workflows end-to-end can significantly improve accuracy and efficiency, for both client-facing and internal operations.
A significant operational challenge for insurtech is the need to standardize processes while simultaneously scaling operations processes for growth. While documented “standard” processes are often a requirement for compliance and regulatory purposes, the reality is that insurtech teams can outgrow their processes before the ink is dry.
To be clear, this category of automation software is not the same as business process management (BPM software), robotic process automation or process modeling solutions. Business process automation tools provide teams with a means to not only document their processes, but also an operations system to streamline team workflows and eliminate unnecessary, manual steps and costly email back-and-forth with automation.
Process automation also emphasizes the end-to-end streamlining of processes, including the collaboration of teams involved – not just the robotic execution of single system tasks. This way, heightened operational efficiency, increased quality, and audit-ready documentation are achieved within the same tool.
The benefits are multi-dimensional. Not only can internal processes be optimized, but insurers can also use process and workflow automation to improve their most important customer experiences – for example, speeding up claims turnaround times or fundamentally simplifying the customer experience.
2. No-code/low-code tools
When it comes to the software tools adopted by insurtech businesses, no-code/low-code tools are absolutely booming.
There are two reasons for this:
First, no-code/low-code tools enable business users – not just IT engineers – to design and implement the apps and solutions their teams need, with little or no technical training. These tools put the power of developing solutions into the hands of business stakeholders who understand the operational requirements best, yielding drastically increased speed to results.
Instead of the traditional digital transformation approach of teams bringing business needs to IT, plotting out lengthy delivery timelines, and (often) engaging consultants, the no-code/low-code way enables the operations lead to skip IT, and use drag-and-drop functionality to design, deploy, manage, and update a custom, automated solution in a fraction of the time usually required: from 6-12 months, to 6-12 hours.
What this means for insurtech business operations is that customer facing and internal processes can (and should be) optimized with greater agility, less cost, and without bottlenecking internal engineering teams.
Which brings up the second reason for no-code/low code tools and their fast-growing popularity: these agile tools remove a massive engineering burden from overstretched internal IT teams. With IT no longer requested to develop hard-coded solutions for each internal operations requirement, they can release pressure from their backlog and maintain their focus on developing and delivering better products to market.
3. Virtual assistants (AKA Chatbots)
The insurance industry deals with millions of customers every day – each one having unique inquiries about outstanding claims, coverage, policies, account updates, and more.
Customer support can only cater to so many inquiries at a time, and – as in other industries – long wait times, an inconvenient customer experience, and untimely issue resolution drive buyers directly to competitors. In fact, one-third of buyers say they would consider switching providers after one poor customer service experience.
To remedy this, insurtech businesses have widely adopted rules-based and intelligent chatbots within their website and mobile app experiences. Everything from claims processing, lead qualification, customer support, and even personalized recommendations can be achieved with a well-designed chatbot application, and delivered with greater convenience to the customer.
As one example, customers despise the number of steps involved when researching and buying insurance.
Chatbots chop the experience down to the most minimal and clear steps of the process, and carry the user through the process in a conversational manner. By keeping the process clear and consistent, and removing a layer of unnecessary human intervention on the provider side, insurtechs save big on cost and simplify customer onboarding for everyone.
A support operations team can handle only so many tickets and CRM updates at a time, but well-designed, intelligent chatbots are fully automated and infinitely scalable – whether you have 10 or 1000 visitors on your site. In order to stay competitive as an insurtech provider, this degree of support velocity is an absolute must. Your customers will expect it.
Set up insurtech operations for success – in 2023 and beyond
What's the difference between an insurtech business and a winning insurtech business? It’s operations teams and their processes.
Because, at the end of the day, insurtech businesses deliver an essential product to the market which serves a core, existential need. The innovation of an insurtech product lies not in the product itself, per se, but in how the product is delivered: conveniently, safely, quickly, and affordably.
An insurtech’s ability to deliver their product with excellence depends entirely on the efficiency of its business processes (both internal and market-facing) and the technology it employs to support them. Continuous process improvement – a trait of every great operations leader – is what separates the winners from the losers.
Where to start first?
Most essentially: by leveraging an end-to-end business process automation tool with no-code/low-code functionality, insurtech businesses can automate their most time- and resource- consuming processes, regardless of complexity, stakeholders, or systems involved. And they can do it all by themselves, with little or no involvement from IT, in a fraction of the time. Here are some must-have features of your process automation tool to look out for when considering a tool for your team.
Technology and process optimization are changing the insurance industry from the inside out. This change is most noticeable in the insurer’s business operations.
It remains unclear what the next big leap forward will be for insurtech or who will emerge on top as the winner. In either case, companies will need to renovate their dusty, inefficient business processes in order to leverage the technologies that will help them to deliver better insurance experiences, and stay competitive in the years to come.
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