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The unique challenges of digital transformation in commercial insurance

The unique challenges of digital transformation in commercial insurance | EasySend blog
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6 minutes

The commercial insurance industry is facing a number of unique challenges when it comes to digital transformation.

High degree of variability

One of the key challenges is the variety and complexity of risks that businesses face. Every business is different, and so is the risk they face. Unlike the personal, auto, or homeowner insurance industries, commercial insurers must deal with a much wider range of risks, each of which can be extremely unique. Even within the same industry, there can be a wide range of business models. This makes it difficult to create standardized processes that will work for all businesses.

Even claims processes for the same insurance event can vary greatly from company to company: a shattered glass in an IT firm's office vs. a smashed glass in a car dealership is one example, as is a fire in an office building vs. warehouse.

Complex quoting process

Another challenge is the complex quoting process. Quoting for commercial insurance is often very complex because businesses have such diverse needs. Unlike quoting for auto or homeowner insurance, which is fairly standard, each business is unique. 

The requirements for a lawn mowing business and a software firm, or a car dealership, are different. This means that insurers have to be able to adapt their digital processes to a wide range of different business types, making it very difficult for insurers to develop a one-size-fits-all quoting solution. 

Many data points to collect

Moreover, there are so many more data points and variables to consider in commercial insurance, such as the type of business, the size of the business, and the location of the business, the way each business is run, the products they sell, and the services they provide - all of it must be considered when assessing risk. 

The amount and variety of data that needs to be collected and processed are enormous. To get an accurate quote, commercial insurers need to gather a lot of information about the business, its operations, and its risks. This can be a daunting task, especially for businesses that still rely on manual data gathering.

Reliance on manual data intake

Another challenge is the way in which commercial insurers collect data. Unlike auto insurers, who can rely on a more standardized data from sources like DMV, credit unions etc., commercial insurers have to collect data manually from a variety of sources. 

Most commercial insurers still rely on paper applications, emails with PDF attachments, and manual data entry to collect information from their clients. This is a slow and error-prone process that can lead to lost or incomplete data.

To make matters worse, the data comes in multiple formats from different sources and needs to be manually processed and entered into the internal systems. This is a very time-consuming and error-prone process.

This inefficient data gathering can make it hard to get an accurate picture of the risks involved and make informed decisions about pricing and coverage. It can also delay the quoting and binding process, which can be frustrating for customers.

Complex workflows

It is not only the sheer volume of data that is a challenge but also the complexity of the process.  The workflow for commercial insurance is often complex, involving multiple parties. This is because there are so many different steps involved in underwriting a policy, from collecting data to assessing risk to generating a quote. 

There are a lot of steps involved in digital data intake for commercial lines, often involving multiple stakeholders on the customer side, third parties, and various departments within the insurer. Each step in the process can be very time-consuming, and it can be difficult to automate.

For example, a cyber insurance application will often need to be signed by the CEO, CIO, and CISO of the company. The application itself can be very long. 

The weight of legacy systems

Lastly, many commercial insurers have legacy systems not designed to handle digital data. 

These systems are often inflexible and difficult to use, which makes it hard to integrate new digital technologies. Relying on outdated technology puts you at a competitive disadvantage.

Unlock the potential of digital transformation for commercial lines with digital data intake

There is an opportunity for commercial lines to use digital data more effectively to improve the customer experience, increase operational efficiency and drive down costs.

In particular, new technologies such as robotics process automation (RPA), artificial intelligence (AI), and machine learning can help commercial insurers automate manual processes— freeing up time for employees to focus on higher-value.

Commercial insurers are also starting to use customer data more effectively to segment and target specific types of customers with specific products— another area where lessons from personal lines can be applied.

However, taking advantage of these opportunities is contingent on having high-quality, complete digital data - which is often not the case in commercial lines. It is impossible to digitally transform without digitizing the customer data intake first.

Digitizing customer data intake in a project with a great potential ROI. Here is why:

  1. It streamlines the customer data collection process: Complex data, document, and signature processes can take days or weeks to complete. A digital solution will automate and expedite these processes, making it easier for customers to apply for commercial coverage online and get quotes faster. Digital forms that can be completed by customers online eliminate the need for paper forms, back-and-forth communications, email attachments, and manual data entry.
  2.  It improves data quality: By digitizing customer data intake, you can ensure that all information is accurate and complete at the point of entry. This makes it easier to segment and target customers and to make informed decisions about pricing and coverage.
  3. It enables innovative technologies: To fully reap the benefits of digital transformation, commercial insurers must also integrate their legacy systems with new digital technologies. Digitizing customer data intake is the first step for technologies such as AI/ML, RPA, and others that rely on accurate data.
  4.  It reduces operational costs: By automating the data intake process, you can reduce the time and resources required to collect, update, and maintain customer data.
  5.  It improves the customer experience: A digital customer data intake process is faster, easier, and more convenient for the customers.
  6. It enables end-to-end workflow automation: By digitizing customer data intake, commercial insurers can automate their entire workflow from quotation to binding.

Digitizing data intake with no-code

Digital data collection is the essential first step to digital transformation. However, data intake processes for commercial lines require a degree of customization that is unprecedented in other industries, making it  time-consuming and expensive to develop and maintain custom code solutions.

The good news is that there is a solution to this problem: no-code data intake platforms.

No-code digital data intake platforms are an emerging class of tools that enables commercial insurers to quickly digitize their unique customer data intake processes without needing to rely on IT.

By using no-code, commercial insurers can more easily digitize their specific processes and create digital data intake forms tailored to their unique needs, transforming how they collect customer data for quoting underwriting or claims.

What's more, the data intake journeys built with these platforms are flexible and can be easily customized to meet the specific needs of each commercial insurer.

No code data intake tools offer a number of advantages:

  • Automate unique data intake processes quickly and easily without reliance on IT
  • Build complex multi-step workflows with conditional logic and multiple roles
  • Connect disparate data sources into end-to-end interactive process
  • Build integrations quickly and easily with internal systems and third-party tools
  • Rapidly digitize their customer data intake with minimal investment.
  • Flexibility to easily make changes to data intake forms as business needs evolve

If you are a commercial insurer looking to digitally transform your business, start with digital data intake. It is the foundation on which all other digital transformation initiatives must be built. No-code tools offer a quick and easy way to do this, enabling insurers to rapidly digitize their customer data intake processes with minimal investment.

Want to learn more? Contact us to schedule a demo.

Baiju Chandran
Baiju Chandran

Baiju Chandran is an experienced Product Consultant and Digital Transformation expert with a demonstrated history of working in the information technology and services industry.