Aite-Novarica discusses the next wave of digital transformation in InsureTech (from core systems to CCM).
This article explores insights from leading life, health and property and casualty insurance executives of their priorities, challenges and outlook on the future of customer communications and the impact of digital transformation.
As science fiction writer William Gibson once famously said, “The future is here—but it’s not evenly distributed.” The same can be said for the digital future of the insurance industry, where there has been a steady, though uneven, march toward better systems, better processes and more empowered workers.
In fact, in the next five years, insurers will be investing heavily in improvements to their customer communications management (CCM) solutions at a rate of 10% per year. This means that by 2027, it’s likely that over half of all insurers will have made the move to replace or upgrade their current CCM platforms.
In a recent webinar hosted by Cincom, Eric Weisburg, Insurance Executive Partner Services with Aite-Novarica Group, pointed out how the data supports the extension of a broader trend InsureTech transformation.
“Now that most insurance carriers have upgraded and modernized their core systems, the next wave of transformation lies in the other connected solutions within their technology ecosystem,” Weisburg said.
The best part is carriers don’t need to wait to get moving into the digital space for the big decisions to be made. “Insurers are clearly recognizing it’s time to refresh their current CCM portals to take advantage of some of the new features and capabilities in the marketplace today,” Weisburg added.
Weisburg says that for businesses that are just exploring core upgrades, one of the advantages of replacing their CCM systems prior to a core transformation is that “the new policy forms you are able to generate will be able to be used in any new policy administration system by decoupling those forms from any current platform, furthermore, reducing risk of lost information.” And it represents a fairly simple, but powerful, transformation of core provider CCM activities.
In a recent insurance industry survey conducted by Aite-Novarica, nearly all insurers surveyed believe that the benefits of a CCM system are important parts of their operations across business units. Of the insurers that reported, 87% believe that increasing customer loyalty and retention are an important or very important top priority, followed by lowering printing costs, ensuring regulatory compliance, improving customer acquisitions, going to market with new documents quickly and reducing dependence on IT resources.
Upgrading ancillary systems like customer communications management (CCM) platforms have gone from “fun” to “fundamental,” according to Weisburg, and the data supports this. Among businesses’ top three priorities for 2023 and beyond, seven out of 10 insurers overwhelmingly have as their highest priority to achieve greater speed to market by having IT deliver either product changes or new products.
From the vendor’s perspective, this trend comes as no surprise. In a recent online conversation with Weisburg, Cincom Product Marketing Manager, Will Stagl, reflected on the trends that are driving insurers to streamline and consolidate their tech stacks and look for ways to empower end-users and relieve some of the burden on IT.
Recently, Stagl has observed this important shift when talking with insurers about the need to streamline, consolidate and manage legacy systems and “Frankenstein” platforms that are cobbled together over sometimes as many as 30 different interfaces. Stagl has also observed that it’s become very important for insurers to get beyond the core and integrate their CCMs more fully.
The Digital Evolution of Customer Communications Is Here
Learn more about how CCM has impacted one of Cincom’s customers, CareSource, in this clip.
For more insights on industry trends and how CCM fits into your CX strategy, check out the on-demand webinar that highlights Aite-Novarica’s survey of insurance providers, including:
- Industry-wide business trends and spending priorities
- Factors that are driving change in how insurance companies communicate with customers
- Future-proofing your communications strategy
- What to look for in a customer communications partner