Digitalisation: A game changer for commercial insurance

Commercial insurance is very much a business based on information and people. Yet, it has been relatively slow to digitise. Behind the scenes, a digital evolution has started to transform the insurance sector in the last few years. But now, it is really taking off.

Drivers for change

Several factors are combining to accelerate the digitalisation of commercial insurance. The insurance industry is acutely aware of the need to address customer pain points, such as time-consuming and burdensome processes. It is also conscious of the need to leverage the vast amount of accessible risk-relevant data to support companies as they navigate a fast-changing risk landscape.

At the same time, advances in data analytics and AI technology are giving the industry tools to take customer services to the next level and provide new service offerings.

Faster, accurate data processing

Today, most data exchanged between clients, brokers and insurers is via email and attachments. Huge amounts of time and resource are spent in collecting, entering, re-entering, and verifying data by risk managers, brokers and insurers.

Inter-connectivity between players is limited, while we also face a lack of industry standards. Unlike the banking industry that has established international standards for processes and systems with SWIFT, insurance is still very fragmented. But the industry recognises this model looks outdated – unfit for purpose – in a world of digital commerce and powerful analytics.

To the ultimate benefit of clients, digitalisation will automate and speed up insurance processes, enhance transparency, and improve the quality and accuracy of data. With seamless data flows within the insurance ecosystem, the process of obtaining data should be almost instant. This will remove the need for back-and-forth time-consuming interactions within the ecosystem, and should enable insurers to reduce error-prone or repetitive tasks.

Overcoming the data challenges

Digitalisation of complex commercial business will not be a ‘big bang’ transformation. The goal should be to fully digitalise data exchanges between insurers, clients and brokers, but this takes time because there are a lot of parties involved, and a lot of behaviours to change.

We are still in the early stages of the digital transformation, but at Zurich Commercial Insurance, we are already seeing progress and results through interfaces (API) and portals that facilitate direct connections between insurers, clients and brokers. We are also now seeing the emergence of technology platforms that facilitate the exchange of exposure data between multiple parties.

However, across the industry, there is still more effort needed to integrate internally, to be able to connect externally and really scale the industry proposition. Insurers face a major challenge streamlining processes and leveraging data across multiple lines of business, regions, business units and legacy systems. Therefore, integrating systems into so called ‘workbenches’, will improve the customer and user experience significantly.

Insights and innovation

According to Sierra Signorelli, CEO Zurich Commercial Insurance “The ability to link different external and internal data sources also unleashes immense potential for generating insights, simplifying processes and supporting innovative propositions for clients.” With better data flows, commercial insurers can generate insights using analytics and AI, which can be made available to clients quickly in an understandable and engaging way. This enables insurers to provide more tailored solutions and help customers proactively prevent and mitigate risks. For example, at Zurich Commercial insurance, we have built a comprehensive data and analytics platform to support better insights generation.

Digitalisation should also unlock new risk transfer products and advisory services for commercial insurance customers. Customers can expect better insights and advice, including on emerging risks like cyber and climate change. For example, insurers can help to enhance customers’ resilience to climate related events by analysing their global environmental risks.

Empowering people

A big advantage of leveraging data is to enable faster fact-based decision making, empowering more informed decisions in underwriting, claims and exposure management. Armed with insights and integrated digital tools, insurers can also upskill employees and provide them with on-the-job support and learning, and sharing of best practices through automated suggestions.

Despite an increased role for technology in commercial insurance, we will always be a people business. In fact, digitalisation should enhance the industry’s advisory expertise, and give underwriters, risk engineers and claims professionals the information and tools they need to better service corporate clients.

Re-imagining insurance

Digitalisation of commercial insurance will not be easy, but it is achievable, and the potential rewards are huge. It has the potential to solve some of the most persistent pain points for clients, and unlock innovative solutions to some of the most challenging risks.

Sharing data seamlessly will be mutually beneficial and it will increase choice for clients. With better data and insights, we can all make more informed decisions around how to best mitigate, finance and transfer risks.

Originally published in Commercial Risk on July 11, 2023