The Insurance industry is changing. Insurers today are under tremendous pressure to attract customers, and even more to retain them. Rising expenses, increasing customer expectations and an ever increasing threat from competition makes it even harder for insurers.
In this scenario, insurers we work with are realizing that operational efficiency is an overall approach that can help overcome several of these challenges that they face. They are adopting several different programs to achieve optimal operational efficiency – programs aimed primarily at creating greater operational flexibility, agility and simplification of operations, which also leads to a better customer experience and lower costs.
Exhibit 1: KPMG and ACORD conducted a study of over 60 global life, P&C, composite and reinsurance carriers with premiums ranging from less than US$1 billion to more than US$10 billion to identify the challenges and opportunities insurers typically face with respect to improving operational efficiency
How did your organization pursue operational efficiencies in the past 12 to 24 months, and how does it plan to pursue them in the next 12 to 24 months?
Source: Operational Excellence in Insurance – A KPMG & Accord Survey
What are some of the operational efficiency levers?
Streamlining existing business functions – Insurers are focused on a holistic scrutiny of existing business functions to identify improvement areas. Techniques like business process reengineering through simple tools are adopted to remove non value add functions and improve operational efficiency.
- Basic Automation of business functions – Inclusion of digital/automation projects to optimize existing business processes is another strategy that is being widely adopted. Automation techniques like robotic process automation/chatbots are being implemented to simplify workflows for highly repetitive, time consuming and labor intensive tasks.
- A holistic Digital Transformation approach – A holistic digital transformation approach is definitely a large scale enterprise initiative but one that delivers sustained business excellence and value. This approach involves reimagining the existing business operations and combining the front middle and back through automation, technology products/ platforms, API(s), data insights, connected devices, chatbots etc.
So what approach may work best for you?
The approach that may be suitable is dependent on the maturity of your particular business and also where the business currently stands in the transformation journey. Insurers need to have clear-cut expectations from the digital transformation initiative and then follow a phased approach to derive maximum value. We are seeing several insurers partnering with third party vendors so that they can go through this journey to higher operational efficiency smoothly; partners like SLK Global Solutions that have helped customers with an-depth assessment of existing business functions to identify potential areas of business process reimagining/ reengineering and to recommend best approach/ methods to be implemented. With a good understanding of insurance operations, lots of experience in process transformation, the initial assessment is quick, not expensive, and comes up with simple steps that lead to ‘’quick wins’’ in operational areas, with benefits not far behind.
About SLK Global Solutions
SLK Global Solutions is a business process transformation enterprise offering technology-enabled products and solutions for the financial services industry. With over 18+ years of experience SLK Global has helped several financial services firms in their business transformation journey by leveraging SmarTransTM, its consultative partnership based methodology to deliver reliable business transformation solutions.
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