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Top Trends and Challenges in the Insurance Industry

Top Trends and Challenges in the Insurance Industry

ServicePower recently held a lively partner spotlight roundtable, moderated by Marco de Vries, Senior Director, Sales and Partnership Enablement, ServicePower, with three executives from Cognizant: Mehesh Natagjan, Head of Strategy & Insurance Solutions Group,

Tim Queen, P&C Practice Leader, and Raja Nellaiappan, Head of Insurance Partnership.

Here’s a recap of the insights on technology changes, opportunities, and challenges impacting the insurance industry shared from this recent ServicePower partner spotlight roundtable.

Insurance Industry in Flux

“The insurance industry is going through a lot of change,” explained Mehesh Natagjan, Head of Strategy & Insurance Solutions Group, Cognizant. “Insurancers are realizing today that they are selling a service, not a product. So what that means is their acceleration is going to be faster in terms of digital change and transformation.”

With the need for digital transformation, questions for insurance organizations also arise. How will they execute digital change and transformation? How will these companies stay nimble? And how are they going to give that customer experience?

Natagjan added that the customer experience is also about the experience of partners, employees, and everybody in that ecosystem. 

Technology has a critical role in answering these questions and delivering the best customer experience. Thus, investment in insurance technology has increased. 

“Cognizant is helping these insurance companies anticipate what is next to deliver on the customer experience and unlock growth,” said Natagjan. “ServicePower as a partner is playing an important role in using technology within the claims process.”

ServicePower’s Marco de Vries agreed on the focus of the overall customer experience because “all of us have experienced that as customers, regarding claims and damages.” In short, we’re all insurance customers too. 

Observations on Insurance Trends and Challenges

The roundtable topic turned to the top trends seen in property and casualty and a discussion around whether there were any challenges insurance carriers need to manage or opportunities to take.

“The pandemic has had an impact and some lines of business have been able to adjust but a lot of challenges are persistent for insurance,” explained Tim Queen, P&C Practice Leader, Cognizant. “There is the changing nature of customers who want that Amazon-like experience.”

He added that some insurers have been able to recognize this need, while others have not changed.

4 Ways Insurers Can Identify and React to Trends in the Insurance Industry

  1. How are Insurers positioning themselves to be proactive and agile? You need to have a holistic point of view and also look at your company’s culture, as well as processes. Organizations must also ask themselves whether they have any ownership of the processes and see how technology can be added and improve processes.
  2. Anticipate where the next change will come from. Is it from partners, customers, or employees? Digital technology cuts across all distribution channels in the industry so that may be a catalyst for change.
  3. Driving efficiencies. Are you pricing effectively for what customers are looking for? How do you redesign, manufacture, and sell your products? 
  4. Regulatory scrutiny. This is an area that is sometimes overlooked. How are you going to use that data to help you as an insurer be reflective of the regulatory security that comes into play?

Improving Insurance Experiences and Efficiency 

Marco de Vries asked the roundtable what strategies Cognizant is deploying to address the challenges. 

“Everything goes through at least 20 to 30 steps to get something done in insurance,” said Mehesh Natagjan. “Cognizant is looking to simplify all this for the client.”

Echoing the strategy of simplifying processes, Tim Queen explained that they look for five key focus areas to help the insurer navigate the changes. 

5 key focus areas to improve insurance efficiency:
  1. Ecosystems and core modernizations. This area is about transformations of systems and approaches, but it’s important to note that some insurers might be in their second or third phase of digital transformation too. However, the orchestration of the ecosystem can provide that final 10 miles of value to insurers.
  2. Experience. Everyone is a consumer of data; everyone is a customer of data. Cognizant aims for that seamliness interaction. How do we simplify that for customers? Customers want to stay with that insurer if the experience is good. 
  3. Operations model. Insurers are looking to drive efficiencies and Cognizant is really focused on this area as well. 
  4. Data. Focus on the concept of the data. In particular, actionable data insights should drive every action.
  5. Need to pivot. Insurers need to be fluid and able to shift when the need arises. The pandemic proved that agility is a necessity to stay competitive. 

“These five areas underpin our strategy and ability to execute on the experience to deliver on these,” added Tim Queen. “We are very much focused on the partner ecosystem and partner with the best-of-breed partners like ServicePower.”

“Five buckets-of-gold” investment trends

The moderator asked Raja Nellaiappan, Head of Insurance Partnership, Cognizant about his insights and observations of current trends within the insurance industry.

“Funding in insurance tech is hitting $15 billion globally, which is almost double from the year before,” said Raja Nellaiappan. “There are big bets on client ambitions and the clients, in this case, are the insurers.”

What is driving all that investment in the insurance industry?
  • Cloud takes center stage. The cloud is driving innovation and accelerating product rollout. Cloud is critical and the many investments in this area show proof. 
  • Wisdom of data. Data comes from numerous sources (internal and external). We are seeing a lot of investments in the capturing of data. 
  • Trust-based architecture. Bringing that data requires that architecture is in place. For example, Cognizant is partnering with a blockchain company to tap into needs. 
  • Analytics and actionable insights. Once the foundation is ready, the data analytics need to be actionable and the data must be transformed into actionable insights. Innovative organizations are looking to hyper-end automation with little or no interaction from humans. 

“I am excited about the partnership with ServicePower as our joint value to the client's cuts across all these buckets,” stated Raja Nellaiappan.

Marco de Vries also added how ServicePower is glad to partner with Cognizant to overcome challenges and seize opportunities.

“The current field claim process is manual and also lacks data and visibility,” said de Vries. However, he explained that partnerships between companies like ServicePower and Cognizant can make great changes to the insurance industry to drive operational efficiencies and improve the policyholder experience.”

Discover the many ways that ServicePower transforms the claims journey for insurers and consumers. Explore how.

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