In recent years, digitalization has changed insurance companies and will continue to do so going forward. There are fewer and fewer traditional customer-broker relationships. And in the property insurance market in particular, customers are much more willing to make a switch than they are in the case of health or life insurance. The use of comparison portals is also making it easier and easier to find the most inexpensive product on the market with similar benefits. For insurers, this means that they must adapt to these requirements accordingly and focus on the specific needs of the customer and not lose them to the competition. In a fiercely competitive market, it must therefore be possible to respond to customer demands as quickly and as flexibly as possible. Of course, suitable cost efficiency also plays a major role in this.
Here, cost efficiency not only applies to IT costs, but to-process execution as well. Market analyses show that at least 25 percent of IT budgets fall within the area of maintenance and operations.
Standardization as the basis for optimization within the insurance company
On the one hand, insurance companies find solutions for optimizing this cost apparatus by standardizing their core systems. However, they also do so by using SaaS models that extract the complete cost optimum and standardization potential.
An extension of this model is the Business Process as a Service (BPaS) model. This not only focuses on achieving the optimum operating costs in the area of operations, but above all on optimizing an insurance company's services and processes and providing them as part of a cloud-based eco-system. If leading analysts are to be believed, it will be possible to achieve a degree of insurance processes automation of up to 70% by 2024.
If you look at current developments in artificial intelligence and ChatGPT, this is not only a realistic figure - the automation figure is probably even higher.
Business Process as a Service: What are the requirements?
But how does an insurer actually benefit from Business Process as a Service, not only in terms of optimizing its overall operating model, but also in order to increase the efficiency of its processes over the long term and guarantee its customers the best customer experience?
More and more insurers are opting for a platform approach
More and more insurers are focusing on a platform approach from one provider. This is in order to achieve homogeneity within the various systems and to obtain a uniform data budget. The use of such a platform not only simplifies a SaaS strategy, it also enables a fast and flexible connection to diverse ecosystems and different sales channels. This also creates the basis for Business Process as a Service, as by collecting data from different channels, insurers are able to analyze which channels make the insurance experience most attractive to customers. Workflow systems are already being used to process this data in order to achieve specific degrees of automation, and thus create an additional basis for Business as a Process: the standardized description and automation of business processes. Here, prefabricated models that are part of the standard software can achieve significant savings potentials through process handling. Within the adesso in|Sure Ecosphere, it is possible to use a basic set of automated processes as an integrated platform component and thus, with little configuration effort, achieve a significant increase in efficiency.
Artificial intelligence as an additional driver of automation
The use of a workflow system is the first step to interpreting data that can then be further processed by robots or artificial intelligence. However, you can also use this data to train systems accordingly and to support the overall process with the help of AI. This clarifies many things beforehand. This is especially helpful in the areas of claims processing and settlement. Reducing claims cost ratios can on the one hand be achieved by automating key processes, but also by using AI to query specific information from the injured party, claimant, or other parties involved in the claim.
The combination of all of these technologies is the basis for a Business Process as a Service model in which either individual business processes or all business processes are outsourced and handed over to a service provider. One of the main advantages is flexibility and counteracting a lack of scalability.
The use of Business Process as a Service is a strategic topic that you should consider, one which achieves the most efficiency in end to end digitalization. The ideal scenario in this case involves a high degree of automation with perfect lean and simple processing rates.
Business Process as a Service can revolutionize insurers
In times of increased requirements and a shortage of specialists, Business Process as a Service can become a profitable approach for small and medium-sized insurers. Used with artificial intelligence, these models can be continuously developed and can automate entire subareas. However, the path to this goal must be one that can be easily trodden via the standardization and homogenization of the IT landscape until you have achieved a viable SaaS model. This is then expanded to your business processes.