Insurers embrace disruption with reskilling of talent

Over the past 16 months, the ways people work and live have been fundamentally impacted. The expectations are that even following the COVID-19 pandemic, organisations across industry sectors can no longer revert to their traditional approaches. Insurers have already taken this to heart and have redoubled efforts to modernise and digitalise not only their systems and solutions but also their employees.

A distributed workforce has become part of the new operating standard. This is not to say the transition has not been without its challenges. Financial services providers like insurers who used to rely on meaningful in-person engagement with customers on a broker level, have needed to rethink how to effectively harness technology to still provide a quality experience. And with the enforcement of the Protection of Personal Information Act (POPIA), this must be done in such a way that personally identifiable information is kept as secure as possible.

McKinsey examines the importance of a ‘survive and then thrive’ strategy that balances digitisation, improving operational efficiency, improving cybersecurity defences, and enhancing the customer experience. Within all these elements lies an opportunity for insurers to reskill teams, identify new capabilities, and rethink the nature of jobs in the sector.

Thanks to the likes of robotic process automation, machine learning, and artificial intelligence, an increasing higher level of automation can be introduced in traditional administrative-heavy job functions. In turn, this frees up those vital human resources to deliver on more strategic requirements that can help the insurer enhance the customer experience and differentiate itself from agile insurtechs.


One of the most significant things that have emerged from the pandemic has been the opportunity to reaffirm the purpose of insurance. It comes down to protecting people, communities, and business from unexpected risk while embracing rising societal concerns around sustainability and fairness.

Workforce agility, capacity, and scalability will be instrumental to drive this in the new normal. Insurers must be able to adjust to shifts in claim volumes and customer service inquiries, or even demands for new products more reflective of modern end user requirements. This means that an insurer must be able to reallocate resources quickly and think differently about the strategic (company culture) and tactical (employee skills development) functions.

Business leaders now need to embrace different ways for employees across job functions to reach their objectives. It is no longer about the hours worked but rather the deliverables achieved. Nine-to-five work is no longer a reality. An insurer is therefore reliant on putting key performance indicators in place and measuring the success of the workers in achieving those.


Adaptability and collaboration will be the cornerstones of this digital-centric workplace. This talks as much about the insurer’s ability to work with trusted partners as it does with employees that are based in any geographic location. In fact, collaboration will be geared towards finding the right expertise for specific job functions. This gives the insurer the ability to create a highly connected network of specialists that can build on the wealth of data it has in place.

Insurers must pivot from predominantly responding to customer and broker queries, to helping them through challenging times. By focusing on the social context of the situation and customer needs, an insurer can imbed non-traditional advice and support for customers that differentiates them from competitors. As such, creating an employee experience that promotes engagement, motivation, and wellbeing will be as important to rejuvenating the business as modernising and digitalising operational processes.

Intelligent automation drives operational insurance improvements

Insurers looking toward digital innovations to drive operational improvements in their processes would do well to consider the benefits of intelligent automation (IA). For example, the recent partnership between SilverBridge and Astute Financial Services Exchange which delivers a fully automated intelligent claims processing solution that provides maximum risk oversight while enabling claims to be processed in real-time. It centres on leveraging innovative technology to help reduce the cost of each claim thanks to better ways of detecting fraud.

In fact, managing fraud remains one of the most significant challenges that insurers are faced with today. In South Africa, the latest figures show that commercial crime, of which fraud is a contributor, is the fastest-growing segment in the country, increasing by more than 14% year-on-year. Given the difficult economic conditions resulting from the lockdown, the expectation is that instances of fraud will likely increase this year. Meanwhile in the US, the total cost of insurance fraud, not including health insurance, is estimated to be more than $40 billion per year. This is such a universal industry problem, that the global insurance fraud detection market size is forecast to reach more than $7.9 billion by 2024, growing 26% annually from 2019 to 2024. Hardly surprising then that digital advances to curb this have been welcomed.

Combating fraud

IA combines robotic process automation (RPA) and artificial intelligence (AI) technologies to facilitate rapid end-to-end business process automation and accelerate digital transformation. For its part, AI has become sufficiently proficient at processing unstructured data using complex algorithms. The amount of historical data available at an insurer means that they can improve processes, enhance the customer experience, monetise data, and detect fraud in more innovative ways.

By using the advanced data and natural language processing (NLP) capabilities of AI to mine data from claim forms, fraudulent claims and patterns of fraud can be flagged. Furthermore, AI can identify patterns through the syntax of the descriptions of incidents from several different claimants to detect organised fraud. When combined with RPA, insurers can benefit from the automation and simplification of complex business processes to help virtualise human decision-making.

By continually analysing internal and external data in real-time, IA creates an environment that continually learns and evolves from the data available to it. This can cross-reference and analyse any number of internal and external databases, detecting potential patterns of abuse. Linked with the replication and automation of decision making, IA creates a scenario of increased efficiencies, consistency, and accuracy.

A famous example of this is the sudden increase in broken or stolen TV claims that appeared simultaneously with the introduction of new technology and prior to major sporting events, in this instance the 2016 FIFA World Cup.

In another example, one of the largest insurers in Turkey used to employ a team of 50 people to manually check each claim for fraud based on loose rules and the team’s personal experiences. But considering that there could be up to 30 000 claims a month, this was becoming increasingly impractical. Using IA, the insurer was able to save almost $6 million in fraud detection and prevention costs and significantly improve the customer experience in the process.

Driving down claims costs

As far back as 2017, IA has been found to deliver cost savings of up to 75% with the payback ranging from several months to a few years. With insurers continually examining ways to optimise cost efficiencies, the savings available from IA could mean being able to invest in growing other business opportunities.

Take for instance how NLP can rapidly mine information contained in handwritten notes that go with either claim or insurance-related forms. In healthcare, these could be relevant to standard procedures and diagnostic terms, including abbreviations and diagnostic terms used in writing test results. Once this information is extracted, IA can automatically identify what is missing, classify it, and route it for the best action to be taken.

On the commercial insurance side, the ability to search through enormous quantities of data to detect a variety of fraud methodologies can result in decreased premiums as any objectionable claims are identified before being processed and paid out.

IA will continue to evolve as technology improves, making it even more accurate. By improving its ability to deliver better analysis using faster data, processing capabilities will assist the insurance industry in positioning itself for growth in more exciting ways while being less concerned about managing the challenge of fraud.

POPIA provides springboard to insurance growth

With the Protection of Personal Information Act (POPIA) that came into effect on the 1st of July this year, time for companies to ensure compliance has run out. POPIA has a significant impact on data-rich organisations such as insurers, it also presents them with opportunities to innovate, modernise, and digitalise in ways they might not have considered before.

Fundamentally, POPIA provides guidelines for organisations around the collection, processing, storing, and sharing of any personal information collected by them and holds them accountable for any loss or abuse of information they have. Robust systems need to be in place that can scale as data warehouses grow while safeguarding the integrity of stored information. POPIA has created a springboard for insurers to clean up outdated legacy systems and has enabled the move towards a single, consolidated view of their policyholders, premium payers, and beneficiaries. Insurers can better position themselves in the delivery of customised and richer end user experiences reducing churn while driving business growth.

Insurers will also have to be more transparent in terms of the purpose of why personal information is collected and how it is used, what is stored, and where and who has access to this information in particular identity numbers and bank details. Customer consent becomes imperative in this environment especially when it comes to protecting the right to privacy in terms of gaining access to insights that can help shape individualised service offerings.

Embracing disruption

In addition to cleaning up both historical and current data, insurers can use the cloud to safely store information aligned to their own data governance and data protection policies and procedures. The high-performance computing capabilities available through the cloud in terms of processing big data enables the use of disruptive technologies such as artificial intelligence, intelligent process automation, machine learning, and the like.

Adopting these agile technology solutions and combining them with human experience, the insurer and its consultants will become more adept at delivering customised offerings better suited to the immediate needs of their customers.

Overcoming obstacles

Ensuring compliance, factored with the need to grow can be challenging, POPIA brings with it an opportunity for organisations to implement better technology solutions, rework existing information processing practices, upskill staff, and review internal policies to ensure they are compliant and align to what and how data is collected, processed, stored, communicated, and destroyed.

No insurer wants to fall foul of POPIA best practice. Now is the time to gain a better understanding of the advantages of implementing cloud-based solutions to unlock the full value and benefits of being compliant and simultaneously growing your business.

The rapid push towards digitalisation over the past 12 months has certainly helped in this regard as there is an increased awareness on the benefits of adopting a modernised approach to data and its analytics. All told, POPIA is a business imperative to kickstart data transformation and is most certainly a pillar in terms of how organisations reinvent and innovate regardless of industry sector in terms of the protection of personal information and the use thereof.

Insurers need to make things personal

The COVID-19 pandemic has disrupted the face-to-face engagement process many insurers (and their customers) have become accustomed to. Events of the past 12 months have accelerated digitalisation and modernisation initiatives to ensure organisations can maintain operational effectiveness with the potential to grow in a more connected environment. The personalised, omnichannel customer journey has become a critical part of the potential for this success.

An international survey has found that 54% of customers now prefer direct or digital channels, up from 38% before the crisis. The ability to self-service their requests and be more in control of their own policy management (to an extent) mean end-users now want insurers to deliver on a more digital-centric engagement model. For their part, insurers must recognise that traditional ways of interacting with customers have evolved to entail more than just face-to-face, email, and telephone calls.

Instead, it is about integrating these with the likes of social media, chat bots, and other elements to deliver a more consistent, unifying customer experience. It is no longer good enough just to offer a variety of channels for customers to reach the insurer on. These channels must ‘talk to’ one another to deliver a level of consistency that is still a challenge for many insurers. The technology has now evolved sufficiently to enable this to happen. But it does require the will to change from a boardroom level down all the way through to the first entry point into the organisation.

Combining communication

Linking physical and digital channels in the new normal must be fundamental to help drive operational success. Call centres and brokers will always be a key part of the value chain. However, this is now enhanced with additional engagement points designed to best serve individual customer needs. And by linking the data generated through these channels, the likes of agents, brokers, and even the executives themselves can gain a better understanding of specific customer needs.

Combining this communication can unlock previously untapped growth potential. So, while attracting new customers will always be part of business strategy, upselling to existing clients with products and services better geared to their immediate requirements must not be neglected. An omnichannel delivery model helps to enable this more effectively.

In such a data-rich environment, upskilling agents to use digital tools more effectively will be vital. Insurers must understand the importance of being able to effectively meet the omnichannel demand from customers. And having an empowered employee base with the skills necessary to do this forms a vital component. Another aspect is the ability to integrate data across existing and newer systems while potentially injecting them with the likes of artificial intelligence, machine learning, and even robotic process automation to introduce new layers of customer insights and automation, thereby enhancing the end user experience.

All told, being responsive to an omnichannel customer journey will be one of the cornerstones on which a more modern, agile insurer for the digital world is built.