Insurance Products Archives

Tag Archive for: Insurance Products

Jama Software is always on the lookout for news and content to benefit and inform our industry partners. As such, we’ve curated a series of articles that we found insightful. In this blog post, we share content sourced from Insurance Business America – Insurance Tech Adoptions- What To Consider Before Taking The Leap – which was originally published on March 9, 2022 by Surina Nath.

Insurance Tech Adoption – What To Consider Before Taking The Leap

The industry has been sprinting towards technology adoption over the past few years, but carriers and brokers still need a helping hand when it comes to utilizing newly integrated digital solutions.

There are so many new and shiny platforms coming into the space, and insurtechs are making big promises to insurance companies about how easy the process will be.

“All the noise right now creates a lot of distraction and confusion,” Gilad Komorov, CRO at Lightico told Insurance Business. “Insurance companies have long lists of problems they want to solve, but it’s important to first define a strategy around what to prioritize.”

Breaking down digital goals in a realistic and manageable way enables streamlined processes, and the right tech partners will make sure everything is executed in the right way.

It is too easy for insurance companies to be pulled in a million different directions when it comes to insurtech, but if strategic priorities are established, it helps keep focus on the right aspects.

“A big challenge for insurance companies is doing the homework before evaluating solutions, which is why defining decision criteria is essential,” he said.

Asking how a solution can integrate with an existing technology stack, and how it is compatible with internal processes is vital if an organization is looking for a mature, holistic solution where all boxes will be ticked off.

Related: Accelerate Financial Risk Management and Simplify Complex Insurance Product Development

“Understanding the true business outcome a company is striving for, and assessing what KPIs will be impacted by technological solutions helps drive a much more strategic decision and facilitates a more focused buying process,” said Komorov. “Then comes commercial criteria like budget and ROI.

“If a carrier does their homework, it is easier for the vendor to align with what they’re looking for. I’d advise any carrier to define what they are looking for before looking for solutions. It will help make a more accurate decision.”

To create a comprehensive strategy, a collaborative top-down approach is essential. Middle management needs to ask executives for guidance on what the strategic priorities are for the next two to three years to create a straightforward road map for tech vendors to follow.

“If you don’t think long-term, a company will end up with a stack of solutions that may not work well together to solve the overarching strategic goal,” he said.

Ensuring that a vendor has open APIs that can integrate into back-office systems is another thing carriers and insurers need to consider in the selection process, especially if there is data involved.

“You want that data to be passed from one system to another, and see that APIs not only exist, but are well documented so IT teams can internally know what to do with them,” Komorov explained.

Vendors also need to prove that they have strong technical solutions that will support a company’s infrastructure, as it will help save time getting the new system up and running.

Related: Your Guide to Selecting a Software Requirements Platform for Financial Services and Insurance

“Another thing is the workflow automation, and we put a lot of emphasis on investing time to build a powerful engine that allows different systems to talk to each other. If you can’t build logic across all systems, it will slow down workflow,” he said.

Training and enablement are two key components to consider when implementing new technology, and carriers that partner with vendors that have training programs in place will help drive the adoption process for anyone who needs to engage with the updated platform.

“Evaluating a vendor’s training program is so important,” said Komorov. “A software could be amazing but if it’s not adopted properly, it’s no value for carriers or brokers.”

Leveraging Automation and Technology to Solve Key Challenges in Insurance Product Development

Several current P&C insurance trends are fueling demand for new and updated insurance products, especially because of advances in digitization. Insurance innovation, competition, new market entrants, and changing consumer preferences are some additional drivers behind new insurance product demand. Everything from customer personalization to new and different data sources is inspiring development or modification to existing insurance products – all at a faster pace.

Usage-based auto insurance and behavioral-based rewards are examples of newer capabilities, possible due to digitization, in turn, increasing consumer value and adoption, Embedded insurance, although not an entirely new concept, is trending because of digital ease and convenient availability by placing an insurance offering right at the point of purchase. Travel insurance with digital airline bookings, pet insurance with a banking app, auto insurance bundled in with auto financing, and similarly commercial insurance plus commercial vehicle purchase. Digital ease and access are making it easier to combine these offerings. Things become even more interesting when a car manufacturer and insurer share telematics data and offer a bundled safe driving program to unlock discounts. This is already happening as evidenced by companies like Tesla, Ford, GM, and others.

Embedded insurance fits a number of scenarios geared toward making commerce more streamlined and perhaps more logical as one combined experience and is forecast to drive significant new revenue as well. The concept also bodes well for capturing and maintaining consumers’ attention very much in the moment. Just consider having to search and price various travel insurance options separately and after spending time finding and booking travel where it can be too easy to forego insurance coverage once the presence of mind has escaped. Rental car companies have excelled in promoting additional insurance and taking the extra steps of having drivers decline coverage as part of the contract – right at the counter or online purchase.

What the Insurance Product Experts Say

We recently spoke with several insurance product and regulatory compliance executives and gathered their insights about the state of product development. Insurance product development is often described as slow and expensive, adding to carriers’ existing challenges to automate and reduce expense ratios. Thus, each new product competes for other internal resources and budgets. Development cycles can take several months or even longer from start to launch. When probing a bit more, insurance product owners cite IT backlogs, cost barriers, and slowness around decision making and approvals as some of the common causes. A key component of product development involves approvals through traditional hierarchies which flow from analyst groups to management and from middle managers to executives. Either way, the process is described as a gathering of specialists and individual organizations collaborating together over a long period of time. These steps tend to occur in meetings and through emails which can elongate timelines and be difficult to organize and later trace.

The experts say that such barriers result in a measured volume and cadence of new product launches in any given year. In fact, some product modifications may be abandoned entirely as the backlog for IT projects is recognized insurmountable. One such insurance executive described the completion of a new product as highly dependent upon select, internal subject matter experts with deep institutional knowledge. And, it frequently takes “sheer leadership heroics” to push the process to the finish line. Admittedly, insurance product development is complex, especially when it comes to meeting various state rules and regulations.

People, Process & Technology

Equipping teams with the right tools is one of the three essential, People, Process & Technology legs needed to enable effective business management. This framework has been widely accepted for decades and is even more relevant today. Building the correct set of requirements is the cornerstone of modern product development and this is where insurance carriers’ people teams strive to share, inform and collaborate whether in a waterfall, agile, or a hybrid project environment. Nearly every core functional area has a role to play; from legal research to marketing, from actuary and pricing to distribution. Insurance carrier functional areas are specialized and distinct, so the term, “siloed” is fitting as both a strength and barrier when it comes to coordinating people’s expertise for requirements creation. Invariably, much of the process is manual, unfolding through a series of meetings, email inquiries, and approvals and perhaps tracked on spreadsheets and shared drives, thus can be error-prone, lack updates, and most certainly difficult to trace.

Tools and adoption of technology for requirements management are lagging, both in terms of today’s speed-to-market pace and when comparing other complex industries. Yet insurance carriers are continuously investing to catch up. Sophisticated policy admin platforms are needed to maintain all aspects of policy management and many carriers have embarked or may have recently completed legacy system transformational efforts, and for good reasons. Here are just a few:

New products may depend on third-party data ingestion and accessibility needs to be cost-effective and has been a barrier since legacy systems don’t have efficient connection points to these outside sources.
When a new underwriting data source is presented, the cost-benefit analysis doesn’t support investment costs inherent in legacy systems.
Legacy systems have also created difficulty in understanding and addressing defects that have a direct impact to expense due to the time needed to trace, investigate and apply a fix, not to mention business, regulatory, and brand reputation risks.

Insurance carriers are certainly investing and working with a growing number of applications and are constantly managing long IT project list backlogs. So, playing catch-up is an accurate description when it comes to deploying new tools.

Team Collaboration is a Must

During our research discussions with insurance product development experts, we heard a lot about the level of reliance on key people and teamwork. Some of the common themes expressed by leaders revealed:

In lieu of solid processes and technology, much work is manual, and success is delivered due to sheer, individual “heroics”.
Senior leadership tends to reward these heroics so there may be limited motivation to change. Long development cycles are somewhat accepted.
Solid change management is a major dependency to ensure people are embracing new technologies – systems are only as good as the people that use them so advocacy at a senior level is imperative
Challenges exist due to the many moving parts and functional areas involved in product development – it’s complicated!
Transparency/Traceability of changes. What is the change and associated impacts, who is making the change, why is the change being made, how is the change being tested and implemented are key questions.
There are competing priorities within functional areas that can impede collaboration.

Technology

As technology catches up to make product development more efficient, collaboration and teamwork remain vital mainstays. Organizations are beginning to activate return-to-office plans which involve several flexible hybrid options so new forms of teamwork and collaboration should be in the forefront now more than ever.

The industry has also tackled legacy system transformations noting that few are completed, many are deploying and some have avoided the undertaking altogether because of massive costs and time factors. While there are constant new technology horizons yet to achieve, such as cloud migration, deployment of tools, and user capability upgrades are deserving areas of attention when it comes to striking the right mix of People, Process & Technology. Product development platforms are likely to be one of those priorities for insurers seeking to keep pace with product development and the latest technology.

Simplify Complex Insurance Product Development

Enable process efficiency and real-time collaboration across product development teams to accelerate time to market.

Jama Connect® is a software solution that enables insurance companies to streamline product development by managing project and product requirements from ideation through development, iteration, and launch. It brings people and data together in one place, providing Live TraceabilityTM, the upstream and downstream visibility, and linkages between all activity around each requirement (i.e., design, development, test, etc.), and provides actionable insights into the insurance product development lifecycle. Jama Connect equips teams with the ability to run real-time impact analysis, track revisions and decisions, and ensure the quality of the product you set out to build.

Complex Product Development, Simplified

Eliminate silos to increase efficiencies by aligning teams across the end-to-end product development lifecycle. Jama Connect helps insurance companies deliver high-quality products on time and on budget.

The Challenge

Insurance companies are facing new competitive pressure, digital advancement, and a demand for new individualized products and services. Insurance product development and revision can be slowed by cumbersome regulatory oversight, legacy infrastructure, functional and team silos, and long-entrenched processes and culture. The insurance sector has been slow to adapt, with many teams still using Word documents, spreadsheets, email, and lengthy meetings to make decisions —adding unnecessary time and risk to the development process.

Related: The Top Challenges of Property & Casualty Insurance Product Development

The Solution

With Jama Connect, product owners, product managers, business analysts, developers, and actuaries can align stakeholders (both internal and external) and identify risks early on; allowing them to visualize connections across internal corporate governance, regulations, requirements, and test cases throughout the development process. This enables cross-team alignment, collaboration, and complete visibility across all activities in your entire insurance product development lifecycle to deliver compliant, market-driven products effectively.

With robust integrations across the value chain, Jama Connect allows software teams to work in the tools desired. The flexible integrations support best-of-breed tools leveraged across the product development lifecycle.

Jama Connect aligns to frameworks that support Agile, SAFe, and traditional waterfall methodologies to provide the flexibility to support teams in accordance with their processes of choice.

Learn more about the key features and benefits included in Jama Connect’s solution overview for simplifying complex insurance product development, CLICK HERE

This blog is part of a series written by Alan Demers, founder of InsurTech Consulting and author of Insurance Thought Leadership. For part one of this series, visit: The Top Challenges of Property & Casualty Insurance Product Development. Stay tuned in the coming months for more.

The Emergence of Technology for Insurance Product Development

It seems that the volume and variety of analysis describing P&C Insurance industry trends and predictions have been on the rise over the last few years which happens to coincide with the insurtech movement itself. In this, new meets old paradigm there is much discussion about adoption rates, whether by consumers or insurance carriers themselves, privacy concerns, legacy systems and a host of other barriers. There’s an even greater volume of excitement for all the amazing possibilities to drive revenue, improve bottom-line results and modernize customer experiences. Terms like transformational, industry disruption, and reimagine (everything) were hardly, if ever used, to describe insurance just a few years ago.

Over the past 5 years, insurtech investment has soared with consecutive record-setting levels each year. According to Forrester Research, Inc., over $15b was invested through Q3 in 2021 surpassing global insurtech investments for all of 2020. The gravity of capital infusion has inspired a wide range of technology, new insurance models, and more digital deployment, in turn, raising consumer and business owner expectations. So, it only makes sense that the volume of predictions, speculation on winners and losers and everything insurance news-related, is simply amplified. Well, for 2022 that is changing too with greater attention on climate change, cyber risks, and emerging embedded insurance models just to name a few highly talked about trends. And many of these trends call for new insurance products which are still mostly developed and deployed by each individual insurance carrier, whether with external provider support or not.

Popular 2022 Predictions:

Among the numerous insurance industry trends and predictions for 2022, some of the more popular and noteworthy themes include:

Cyber exposure, demand for protection, products and services
Climate change risks and rising insurance costs
Changing definition of insurers with the likes of Amazon, Tesla, and Toyota selling insurance
Embedded insurance models by combining insurance at point-of-purchase with other products
Parametric insurance for events, travel and the first layer of protection
Digital adoption and demand for new products
Usage-based, sensor technology and reward-for-behavior offerings

There are several other trends extending beyond 2022 that are expected to impact how insurance is bought and sold, serviced, experienced and priced for years ahead. Artificial intelligence is already being deployed, however early on, for many of the more complex use cases. Meanwhile, image analytics are being widely leveraged throughout underwriting and claims, reshaping the customer journey processes with great success. Blockchain continues to be cited as having lots of future promises and autonomous car features are making driving safer and increasing the cost of repairs simultaneously. A common question is, “which emerging technology(s) and startup(s) are most exciting?” The answers range from pragmatic to futuristic, like completely automated and instant underwriting might be someday.

Editor’s Note: In our 2022 Industry Predictions Series, we asked Alan Demers, to weigh in on product and systems development trends he’s anticipating for the insurance industry in 2022 and beyond. Visit 2022 Insurance Predictions Banning Credit Scores Automation and A Highly Competitive Marketplace to read his full insights!

Demand for new products

A common denominator for each of these trends, especially among incumbent insurance carriers, is mounting pressures to launch new and/or modify existing insurance products at a much faster pace. Historically, insurance product development has been relatively slow and methodical, where it can take a carrier months or even longer from start to launch. Thus, speed-to-market remains a top challenge. Complex and individual state regulations, sophisticated pricing segmentation models and nuanced policy language are just a few reasons that explain why insurance product development is so difficult. Add in insurance carrier IT backlogs and competing programming priorities and it all begins to explain why new product development takes such time and effort. Yet, the pace of new product launch is not keeping up with the tempo of new market entrants and changing consumer preferences. Those companies that can launch faster and more efficiently will have a clear advantage moving forward.

Legacy systems and ways of working

In recent years, most of the large carriers have upgraded or are just completing retirement of core systems, replacing far outdated legacy insurance policy administrative, claims and billing systems for new and more adaptable platforms. Such transformations are extremely expensive, in the tens of millions of dollars, and can take several years to complete – and that’s just to contemporize 30+-year-old technology and does not contemplate cloud migration and other investments. The upsides of modernizing core systems are numerous, including ease to integrate new technology which enables insurers to partner with additional solution providers, startups and others relevant to modernizing agendas. Consider leveraging real-time data to better price and manage risk, for example. This can hardly be done with legacy systems and without integration but comes to life with a modernized platform and numerous data integrations from various sources and providers. Much like everything else these days, businesses and consumers demand things to be instantaneous and real-time or insurers run the risk of missing on new business.

In reality, the insurance industry has evolved at a steady pace from the 1980’s conversion from paper to desktop computing, in the 1990’s moving from highly regional to centralized service centers, 2000’s mobility and more recently toward digital and automated. Many in the industry say that more changes have occurred in the last 5 years than the last 20 combined and that is an accurate statement.

When factoring industry trends – insurtech, changing consumer demands, emerging risks and insurer investments, and all other related dynamics – it’s easy to see how new product and product differentiation will play an important role going forward. Partnership insurance models – such as OE car manufacturers paired with an insurer leveraging data sharing, usage-based insurance, and possibly with financing and even connected car payment options – call for product and pricing features much different from traditional insurance policies. Sensor data to predict, avoid, and detect losses will reshape insurance from a reimbursement model to insurance-as-service and likewise will influence new and different insurance products.

Now that the insurance industry is tackling legacy systems, it’s opportune to address legacy ways of working. The seemingly never-ending aftermath of Covid 19’s impact to working environments is still very much unsettled. Despite employee survey results suggesting most office workers prefer work from home for some or all of their work, insurance executives are challenged with measuring productivity and uncertain about sustaining team collaboration going forward. Team collaboration, especially given insurance carriers’ highly specialized and siloed constructs, is imperative when it comes to developing new products. In fact, the speed and efficiency of development cycles is a direct outcome of how well departments and people collaborate, move and approve work, make decisions and move the ball forward. Yet, Excel spreadsheets, email, and meetings are cited as the main ways of working when it comes to product development. So, there is much room for new tools and forward-thinking team collaboration ahead for the insurance industry.

No matter how 2022 insurance industry predictions pan out, it will be another exciting year for insurtech adoption, new tools, and new products alike.