Insurance compliance brings growth opportunities

Insurers should view the changing regulatory environment as an opportunity to redouble their focus on innovation, introducing more product flexibility, and enhancing customer experience with a data-driven understanding of their unique requirements. This will see an enabling transformative shift that will redefine the industry for a digitally-led landscape.

Regulatory technology is emerging that uses sophisticated analytics, data integration, intelligent process automation, machine learning, and other emerging technologies to help drive the modernisation of the insurance compliance function. It encompasses the monitoring of sales, claims, and complaints processes that include identifying fraud and treating the customer fairly while adhering to regulatory requirements. Using these solutions empowers insurers to automate many of the administrative-intensive tasks around meeting regulatory standards giving them more freedom to focus on product development and strategic growth.

Understanding the process

Knowing how to manage the modernisation and digitalisation processes needed for this new environment will become a critical factor to successfully transition to a cloud-driven operation that balances adherence to compliance with improvements in customer experience through more tailored engagements. In fact, those insurers able to use data and analytics to not only improve their core operations are also able to introduce new business models better suited to the demanding, real-time expectations of end-users and regulatory bodies.

Insurers who have implemented advanced analytics solutions to manage and administrate compliance are outperforming their competition, So, while it might be difficult to look beyond the complexities typically associated with remaining compliant, attention is now on customer experience and using technology to transform engagements with policy holders, brokers, and financial advisors to benefit them in their daily lives. By modernising risk, compliance, and governance processes, insurers can pursue their core mission while building a robust and resilient risk management framework that enables regulatory reporting and anticipates future regulatory changes.

Reputation management

Insurers, like any other organisation in the financial services sector, can ill afford to be non-compliant. The financial and reputational risks are significant. Modernised regulatory technology is therefore essential to manage both internal systemic processes as well as employees to put the foundation in place that an insurer complies with all relevant policies and regulatory principles.

A robust, digitally-enabled compliance management system provides an insurer with a competitive advantage that can elevate the business with a differentiated product offering. Because this will help streamline existing processes, less time is needed on compliance monitoring while enabling the insurer to create workflows that support scalability in a corporate responsible manner.

Innovation and new technologies can therefore combine to positively enhance the insurance value proposition without being limited by traditional compliance efforts. Having the flexibility to adapt and scale according to growth requirements while automating much of the regulatory environment will position insurers strongly as we further embrace today’s digital environment.

The evolution towards continuous underwriting

One of the next-generation practices that insurers are looking to adopt to further differentiate themselves and add value to the customer experience is that of continuous underwriting. Essentially, this equips them with the means to collect meaningful data from a variety of sources before, during, and after the risk evaluation timeframe. It therefore becomes an enabler to proactively manage relevant and predictive insights to better deliver services to the end user.

McKinsey writes that migrating to continuous underwriting will evolve in four phases which will increase personalisation and customer engagement. Many are currently in the first phase where insurers are focusing on automating the underwriting process to improve efficiency gains and reduce inconsistencies. Phase two sees the move to accelerated underwriting made possible through digitally-submitted applications. Up next will be the focus on micro-segmentation and personalisation for individualised offers resulting from insights generated from comprehensive data sets. Finally, insurers will deliver continuous underwriting with dynamic adjustments based on customer behaviour.

Continuous underwriting will result in new pricing models with the potential for ‘premium’ options available to those end users willing to share the most personal data about themselves. This will enable an insurer to introduce bonus programmes for meeting set targets (comparative to some of the health rewards systems available today) with more flexible fees available as a result.

Future-proof tech

Continuous underwriting leverages technology such as automation, artificial intelligence, and sophisticated algorithms to extract insights from the vast amount of unstructured data available to insurers in real-time.

Not only will these insights eliminate any potential surprises for insurers (and their customers) when it comes to new policies as well as renewals, but also uncover insurance cross-selling opportunities and help manage their risk management requirements. Take the ongoing lockdown restrictions on the sale of alcohol as an example. By dynamically adjusting premiums and coverage for liquor outlets unable to sell alcohol, insurers can deliver a more targeted customer experience from a small business perspective.

Think of the continuous underwriting process as the combination of intelligent automation, sophisticated rules engines, and data gathering to deliver real-time updates to the process without requiring human intervention. And thanks to how artificial intelligence has evolved, the quality of the process is on par with that of human experts who ‘inject’ their insights into the automated tools available to insurers. However, it delivers this more consistently than what would have been possible if insurers were only reliant on human resources.

A new normal

The full impact of continuous underwriting on the insurance industry will only truly be felt once it is more widely adopted. And yet, the increased operational speed will help meet rapidly evolving customer experience expectations as insurers become more capable of adjusting in real-time to environmental variables.

By adopting this continual process and using digitally-driven systems, insurers can also remove much of the traditional human bias that occurred in the way underwriting was done previously. It is now about taking the data and embedding it with the real-time insights necessary for a superior customer experience.

Personalising the customer experience important for insurers

Personalising the insurance experience is not a new concept. In fact, insurers’ ability to understand their customers on an individual level has long been considered the panacea for the sector. Evolving technology, more sophisticated data analysis tools, and the emergence of artificial intelligent and robotic process automation are contributing to an enabling environment to fulfil this vital step in the insurance value chain. After all, by having an improved awareness of their customers’ actions and behaviours, insurers can deliver more frequent and high-value engagements.

This is imperative if a satisfactory experience characterised by speed and convenience is to be delivered. Much of the current focus for insurers is on the importance of the customer experience and being able to deliver on their evolving expectations. By combining fast and efficient services with rapid issue resolution, an insurer has the strategic pillars on which a successful business in the digital era can be built. By integrating these components, an insurer can deliver a more bespoke customer experience presenting it for opportunities to gain a much-needed competitive advantage. And for their part, insurers are aware of this potential and looking at ways to do this.

Embracing more channels to get this engagement going is becoming part of the agenda for insurers. But it is not only important to offer a variety of channels to choose from. After all, engagement is about more than just delivering different channels for customers to interact with. It centres on providing personalised recommendations based on an individual’s interest, life stage, and behaviours.

But this level of personalisation is not something that can be considered a long way off. Thanks to how many other service sectors have embraced digitalisation, insurance customers also want a tailored offering. This is more so the case after the hard lockdown conditions of last year which have offered the opportunity to reimagine processes and take significant strides towards being a more digital-centric organisation. Fortunately, the wealth of customer data, analytical tools, and marketing technology empower insurers to run multitudes of personalised campaigns. These, in turn, are used to improve acquisition, cross-selling, and marketing return on investment.

Being different

The secret to success in this regard is clear. If insurers want to roll out something that resonates with consumers then they must do so through a differentiated customer service experience. This requires creating a frictionless experience. For example, claims can be processed in real-time using an app at the scene of an accident greatly reducing the complexity of a general cumbersome process.

Additionally, embracing an omnichannel approach is another critical area of focus. This brings together all the available insurance channels to maintain smooth communications with customers when they move through the different mediums. For instance, a query might start with a call to the contact centre, continue with the app, and be resolved via a bot. This is where self-service becomes important as it can give consumers control of much of the experience as insurers introduce more digitally-enabled customer touch points.

Data sense

Customers are willing to provide personal data to get this done. Evidence shows that a higher proportion of consumers are willing to share data collected on their smart watches and other similar wearables. In turn, insurers have relied on more detailed questions and medical records instead of in-person physical exams.

The shared value model driven by Discovery Group reflects a more engaged wellness ecosystem derived from product design, pricing, and insights on customers. It reflects how much people are willing to give by way of information to have this level of customisation and personalisation added to their insurance portfolio.

Intelligent automation providing fresh opportunities for customer-centricity in insurance

The global intelligent process automation (IA) market is expected to top $14 billion by 2024. However, the insurance industry has, in some instances, been slow in reacting to the opportunities presented by the technology. This is not altogether surprising given insurers’ historic slower pace in adopting new technologies when compared to the banking sector for example.

Unlike robotic process automation (RPA), which can be considered a more mechanical process that frees up staff from repetitive job functions, IA combines RPA and artificial intelligence (AI) technologies to empower the intelligent automation of business processes. For insurers, part of IA sees intelligence injected into those business processes that focus on critical decisioning points such as underwriting and claims. So, while RPA relies on algorithms that can replicate keystrokes and greatly assist businesses with high volumes of transactions, IA includes a specific focus on automating decisioning in business processes.

Fortunately, the lockdown has contributed to a momentum shift with insurers realising they can no longer rely on traditional, paper-based processes. Instead, the focus has been on digitising as much data as possible, a critical step before any form of automation can be implemented.

A matter of IP

And yet, when it comes to the decisioning process, insurers still view it as a fundamental component of their intellectual property. One can understand the thinking behind this given the amount of time spent training individuals to become experts in their fields. After all, the potential exposure when calculating risk and performing underwriting functions can number in the millions of Rands if done incorrectly.

The reluctance to automate human expert decisioning with AI is evident. But this does not have to be the case. AI can be used to model the most highly skilled underwriters and claims experts within the insurer and has the added benefit of being available 24×7 which dramatically speeds up historically slow processes, often subject to tight SLAs. This greatly improves the customer experience as self-service solutions can be introduced where people can manage their policies at a time convenient for them.

Given their nature, insurance companies are risk averse and generally slower to adopt new technologies. They are generally reliant on their ‘human experts’ and are hesitant to replace them with automated solutions. But the need to use these experts’ time more efficiently will gradually see insurers embrace IA, thereby freeing up resources now capable of delivering more strategic functions inside the organisation.


It could very well be the focus on customer-centricity that delivers the final push needed for insurers to fully adopt IA. By improving manual and multiple step processes through automation, employees can be repurposed for other, higher valued tasks.

Real-time decisioning through AI can, for example, reduce the number of fraudulent claims. This, in conjunction with other more efficient administrative processes, will bring about a reduction in product pricing that will lead to happier customers and ultimately an increase in profitability and improved market competitiveness.