Between the worlds – where does the digitalisation of application processes begin?

Insurance providers are no strangers to investing in IT, with more and more being spent every year. This is a good thing since the lack of urgency when it comes to digitalisation in recent years is now beginning to come back to haunt companies. Processes are being actively rebuilt, modernised and the application landscape is even being completely renewed in some cases. This applies first and foremost to sales application processes.

Seeing change as an opportunity

Rebuilding something always brings with it the opportunity to do it differently and, above all, better. Insurance providers have also learned to move with the times and offer their brokers, cooperation partners and customers new digital solutions that enable them to conclude their products quickly, easily and, above all, on a case-by-case basis.

However, many insurance providers will continue to rely on ‘old’ host systems. These systems are anything but modern in terms of usability, and using them simply makes it impossible to conclude transactions digitally and process them automatically without media disruptions.

Why is that?

A large number of application landscapes and the associated application processes have grown immeasurably over time in terms of functional scope and they have been constantly developed. However, this was done in part on an architecture that is difficult to integrate into new system environments. This means replacing and rebuilding everything on a different and, of course, cloud-based platform. However, since it is not uncommon for many insurance providers to use a number of different systems ranging into the high double digits in this type of application landscape, this process can only be done in increments. Two worlds collide as a consequence – the new world and the old world. As a result, many insurance providers have set up a parallel operation, albeit largely unintentionally, for the next few years, which must be dealt with accordingly.

Harmonisation between new backend, frontend and CRM systems plays a crucial role here. The only way to sell products quickly and smoothly and for sales partners to manage inventory properly is if the entire package works. Of course, all of the processes needed for day-to-day business must also be available. In order to ensure this, it is more often the rule than the exception that legacy systems are connected, at least temporarily.

Choosing the right partner

It is particularly important to choose the right software manufacturer at an early stage, one that allows for a high degree of scalability as well as product-specific customisation options, even during the initiation phase of a planned replacement. This process can be supported by an implementation partner who carries out a comprehensive evaluation before it starts. Otherwise, the costs for modelling a previously selected system that is supposedly out of the box will continue to spiral before the system meets the insurance provider’s requirements and thus those of the respective user group.

First impressions count

If a sales partner encounters issues with the systems they are using, they still have the chance to react to it themselves and steer the sales experience in a positive direction. In direct sales, on the other hand, there is often only one chance to make the conclusion experience as pleasant as possible for the customer.

If the pricing and conclusion of the contract becomes too complicated for the end customer or is made unnecessarily difficult due to redundant and superfluous information, the customer will quickly lose interest in concluding the contract using an online application form provided directly by the insurance provider. The alternative of quickly choosing a comparison portal is understandable from the customer’s point of view, but at the same time it is problematic for the insurance provider. As long as the potential customer does not have a strong affinity towards the brand and products, the temptation to conclude the contract with another provider is extremely high. The same goes if the insurance provider with whom the policy was originally pushed through appears among the search results shown on the comparison portal. This is especially true for customers for whom price is important.

It is also critical that policies concluded through the provider’s direct channel, at least for standard risks, are done so cleanly and are processed automatically. At the end of the process, the customer must be able to enjoy the same customary scope as if the transaction had been concluded using a comparison platform. It goes without saying that this also means that he or she receives the insurance policy immediately after taking it out – in digital form, of course.

Unfortunately, it is a fallacy to think that the scenario described above should be state of the art despite the extent to which progress has been made in digitalising processes. Even large insurance providers have built application processes in which the information entered is merely stored temporarily until the policy is concluded. Want to know what happens next?

The cached data is e-mailed to an application inbox as a PDF document. And that is where the digitalisation stops. A caseworker then takes over, who issues the policy manually and types out all of the data by hand. Does that sound like digitalisation to you? No? That is understandable. The example should demonstrate that digitalisation is more than just giving old application processes a new coat of paint.

Conclusion

In conclusion, it is important that both the broker and the end customer are offered conclusion options that simply have to work – and without media disruptions. It is now more important than ever to offer the sales department features that help them promote products, an appealing UX design for the user and product-specific highlights (which stand out from the market) for the insurance provider. The competition has simply become too big to not have these things and, as we know, the competition never sleeps. However, if the basic framework of a fully digital conclusion process is not in place, insurance providers should focus on implementing it as best they can as a first step – with a concrete process model and an upstream evaluation.

In the second step, providers can then think about more far-reaching issues, such as optimising insurance products and how they can be positioned on the market in a more targeted way in the future.

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