P&C insurance technology's evolution has cycled through a handful of phases since the mid-1960s, each clearly defined with their own focus and outcomes.

The "north star" of system design in the first phase, the "transaction era," focused on capturing financial data with mainframe/client-server systems. While monolithic and inflexible, these systems enabled the standardization of insurance products.

The mid-1990s ushered in the "process era," during which the systems of the day were designed to help insurers enforce standard processes and management control across the insurance life cycle. These web-based systems replaced paper with electronic claim and policy files, fostered internal collaboration across locations, and enabled straight-through processing and greater functional specialization in claims and underwriting.

P&C insurtech's evolution has now evolved to the third era, the "engagement era," which builds upon the previous eras and will likely continue for several years to come. Let's take a look at the technology requirements of an engagement-era system.

Hallmarks of an engagement-era system

Systems in the engagement era are marked by an ability to meet the user — the customer, the agent or the insurance employee — on their own terms, and provide the experience that they want. As they relate to engagement, several user expectations bubble up; namely, self-service; personalized products and journeys; intuitive, mobile experience; real-time response; and fast claims settlement.

The following provides an overview of key attributes that can help insurers rise above the competition, differentiate themselves and deliver the best possible experience to their users in today's engagement era:

          • Unified core, data and digital. The foundational platform of an engagement era system must support core operations, data and analytics, and digital engagement in a cohesive and orchestrated way.
          • Omnichannel design. Today's users expect to engage with insurers throughout the insurance life cycle across a variety of channels (like mobile, web, email, chat, social and phone) and modes (such as self-service, assisted service, or full service from an agent or broker). This approach satisfies both external customers (like agents or policyholders) as well as internal employees.
          • Consumer-grade user experience. Users must have interactive and rewarding experiences across all devices and platforms.
          • Predictive, guided process. Systems must apply data, machine learning and context to guide processes and decision-making.
          • API-driven design. Systems must be interoperable with other components and systems.

Related: Market trend: Improved customer service and engagement

The one-mind design and its Impact on insurers

It's best to approach building an engagement-era system with the user journey in mind — one that caters to each user's specific objective. This could be any of the following:

        • Consumers researching and buying insurance or making adjustments to their coverage over time

        • Commercial customers managing their claims or reducing their risk

        • Agents or brokers managing leads or processing renewals

        • Vendors wanting to deliver services and get paid for them

These journeys require integration between digital experience solutions and operations solutions, such as core systems. In this "one-mind design," insurance products work together in a connected way so that users get the specific experiences that they want. Digital experience solutions must support all the aforementioned channels and engagement modes for each journey. Operational systems must support the journeys for both transactional and analytical purposes. (In fact, they must support all the permutations of channels, engagement modes, journeys and integrations that make up the entire engagement experience.)

When insurers embrace the engagement era by using technology to meet users on their own terms, they realize some very impactful outcomes. They'll see greater growth and better profitability, for example, as documented in a recent McKinsey survey. In addition, they'll uncover the potential to elevate the work of insurance. Specifically, insurance employees will be freed from basic tasks (like data entry and answering queries) and instead be directed toward more strategic work (like complex underwriting or litigation strategy). This makes for better morale among employees, which translates to better quality of service for policyholders and agents.

P&C insurers are finding it increasingly difficult to differentiate themselves from the competition. One way they can is by focusing more on the user journey — making it intuitive, customized, and available on a variety of channels and platforms. Only by deploying engagement-era core systems with a cohesive, one-mind design can an insurer hope to achieve this level of user focus, ultimately pulling ahead of the crowd and maintaining competitive advantage into the future.

Brian Desmond is the chief marketing officer at Guidewire Software. He can be reached at bdesmond@guidewire.com.

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