Automating insurance and policy underwriting processes: a tale of two businesses
What’s the difference between digitizing processes and not? The short answer is: life and death. Now that might sound simplistic and stark. Yet, it’s becoming increasingly the case for insurance businesses and policy underwriting processes. As Microsoft CEO, Satya Nadella declared: there’s a “digital imperative” for every organization.
We’re going to explain why with a story of two fictional insurance companies taking two wholly different approaches to digitization. The first, Titanic Insurance, is a policy underwriting firm that doesn’t automate its processes. The second, Beagle Insurance, invests heavily in policy underwriting automation.
Beagle will show us what a successful digital transformation journey looks like. With Titanic, it’s a different kind of journey. Spoiler alert — it’s the one destined for the bottom of the ocean.
A brief history of time
For years process automation was seen as a competitive advantage. If a business invested in tools to streamline workflows, digitize paper-based processes, and automate rote and repetitive tasks — it would gain efficiencies, increase productivity, and boost the bottom line.
There were many success stories in insurance. Yet, progress was iterative. No one can automate everything at once. Businesses must prioritize what to digitize first. Employees need to be retrained to adopt new tools. And so on.
But with COVID-19, the shift to remote work increased the gap between those who had digitized and those who hadn’t. And businesses that continue to hold off on digital process automation now face a pretty stark scenario. As Satya goes on to say:
“The case for [digital technology] has never been more urgent or more clear. In fact, I would say it’s existential. The next 10 years are not going to be like the last 10.”
So now, let’s see how this plays out for our two insurance companies.
Policy underwriting processes
Titanic Insurance is heavily dependent on paper-based processes. Titanic’s CEO decides automation isn’t worth it. His approach can be summarized by: Why fix what isn’t broken? We’re in insurance not technology.
But for policy underwriting processes, speed and accuracy is central to success. Determining the right policy and price quickly and then collaborating with brokers, agents, and customers involves managing multiple moving pieces simultaneously.
As skilled as its underwriters are, Titanic soon notices its customer base shrinking. Unbeknown to them, its competitors are offering a much quicker, accurate, and cost-effective service due to policy underwriting automation. Redundancies soon follow, with the company losing its most talented staff.
Beagle Insurance, however, decides to digitize its paper-based process quickly and at scale. With policy underwriting automation, it can streamline core processes, seamlessly connect underwriters to brokers/customers, and automate document-generation processes.
Policy underwriting processes involve a lot of paperwork. With its new technology, Beagle can automatically create branded, accurate documents auto-filled with customer data. With electronic forms customers and brokers can input data in seconds, stored securely in a central cloud. This is then fed into the document generation process. Beagle’s employees soon have more time to focus on higher value work, such as developing relationships and driving the business forward.
What’s more, Beagle now function fully in the cloud, meaning employees are offered remote/hybrid working. This goes down extremely well and makes the organization far more competitive in the talent market.
Payroll and invoicing have always been time-intensive tasks. For Titanic’s finance team, this means hours of laborious work which not only fries the brain but is susceptible to human error. The odd mistake on payroll and invoicing may seem like a small bite off the bottom line, but it builds up over time.
The team is in the office all day every day as important files and reports are still stored physically on site. When they get home and log onto Facebook, they see photos of their friends and families enjoying flexible hours and an improved work-life balance — adding insult to injury.
There’s a new bounce in the step of the finance team at Beagle. Much of the repetitive admin and data input tasks that overburdened the team are now automated. Miraculously, bottlenecks are gone, and the data input work that still exists can now be completed without the same pressure of payday deadlines.
The largest benefit, however, is the freedom given to the team. Free to focus on more valuable and rewarding work, they find new ways to cut costs across the business and streamline finance processes. At Christmas there are bonuses all round, as record savings have been made that have been re-invested in the business.
Onboarding is crucial in helping new employees get off to the right start. However, the paper-based approach that Titanic’s HR team use now seems out of date to new starters. It doesn’t take long to have a noticeable impact. Contracts are lost and need to be resigned. However, this isn’t HR’s biggest problem, as the company is finding it hard to bring in new talent in the first place.
Businesses offering remote working are seeing a spike in talent acquisition and retention. This puts pressure on Titanic’s HR to fill ever-increasing gaps in the team. Often leading to retaining staff that would otherwise have been let go, e.g. for poor performance or unprofessional behaviour. As well as disempowering HR, this leaves a nasty feeling across the company, further reducing morale, which has suffered due to redundancies.
The HR team at Beagle have never been busier, and yet work feels like a breeze. Recently, HR have had a lot of new starters to onboard. With new process automation tools, a full audit was carried out into the state of HR processes, including onboarding. By mapping all the steps involved, they could see what works and what doesn’t. They could then automate and optimize onboarding efficiency.
In the long-term, this means employees start off the right way, integrating easier. The company culture is positive. This is, in part, due to better onboarding, but also because of company growth and the fact that HR has more time to focus on keeping everyone happy.
Underwriting policy automation and more
Want to accelerate your process automation journey? At Nintex, we can bring your underwriting policy processes into the future with easy-to-use tools. Our low-code solution can be adopted across the business, allowing employees without developer expertise to automate the processes that matter most.
With solutions ranging from document-generation, workflow automation, and robotic process automation, Nintex can transform every aspect of a modern-day insurance organization.
To learn about automation in insurance and how to digitize underwriting policy processes, get in contact today.