KPMG: Operational excellence in insurance- Performance, digital and customer experience
Article Synopsis :
It is no surprise that insurers are declaring they have yet to make significant gains in operational efficiency. Every survey tells us that a lack of process standards and strategic vision remain key inhibitors and this KPMG survey is no different.
Insurers that fail to focus on operational efficiency run the risk of securing their imminent demise, astray fail to meet the expectations of customers, agents and brokers.
Most insurers are focused on redesigning processes, implementing sales and servicing channels at a lower cost and repairing/replacing legacy systems.
Yet integration remains at a very low level. A fifth of finance and almost a third of HR (30%) indicated a total lack of integration.
Fewer than one fifth claimed some of their processes were fully integrated, with claims at 19% and policy servicing at 16%. And the story is the same across all functions, including underwriting, distribution, product operations, information technology (IT) and contact centres.
A new focus
The focus is set to shift to claims (55%), policy service (51%) and underwriting (45%) over the next two years.
Those areas with the worst levels of integration will remain a low priority at most respondents’ organisations – 74% for HR and 57% for finance.
Location, location, location
Location seems to determine what will be the next major focus, says the survey. In North America, 60% of carriers have given distribution the highest level of priority. Underwriting, policy servicing and claims are all the next most important processes at more than half of respondents..
Policy servicing is receiving the highest level of priority at 56% of organisations in EMEA, followed by claims (48%) and contact centres (41%).
Doing their own thing
Latin American and Caribbean-based insurers buck the global trend with 58% of carriers seeing finance as a high priority function for delivering efficiency gains.
Overall, the next 12 to 24 months will see insurers look to intelligent automation and alternative sourcing (from 20% to 33%) away from their previous focus (fixation) on process standardisation and legacy systems (from 58% to 48%).
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Digital Insurer's CommentsYet another survey shows that insurers are being slow to adapt to the new world order.
Some seem to have got the message, but others remain bogged down in legacy and slashing costs.
Insurers need to focus on the what is important to them, not waiting to see what everyone else is succeeding at and copying them.
The trends in emerging markets such as Latin America and the Caribbean suggest they are not seeking to apply the same model as developed nations.
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