Completing the feedback loop in a disaggregated insurance value chain

Published: May 30, 2017

Over the last five years or so, we've seen tension with trends in the insurance industry. The two competing priorities are customer centricity and disaggregation among our value chain. We live in a fickle culture and our customers carry a great sense of entitlement to be known, understood, and served the way they want be served. To meet this priority, we've seen a rise in InsurTech providing all the gizmos that surprise and delight the customer (or at least meet their expectations).

Because these InsurTech solutions address only certain compartmentalized elements of the value chain, we find disaggregation; something of a stuttering mess given the backdrop of the customer lifecycle. But, we've said, we must understand the customer in 360°. Moreover, we are accumulating a payload of data that presumably would provide valuable insight to our business, but it's scattered all over the garage. So, the question becomes, how do we assemble to overcome this tension and also ensure we are underwriting good policies?

We have the tools to work this problem. We have our systems of record: our ERPs. And, we've got our InsurTech. We have User Developed Business Applications (UDBAs) probably because we have shadow I.T. running around the enterprise. We have things we need to keep, and things that need to go. As insurers, our product is our process. And, to survive our process must be somehow differentiating.

Moreover, to stay ahead of the curve, our processes must be flexible and open to innovation. What we need to do now, is unify the value chain through an agile orchestration layer within the context of a service oriented architecture. Once we have aggregated the value chain, we will have our complete long-living process network view of the policy holder. And, with that visibility, we can derive insights that inform quality underwriting.

We propose this orchestration layer to be enabled by Pega (leader in Business Process Management, Business Rules Management, and Case Management) with whom we, Virtusa, are intimately familiar as one of Pega's oldest partners, even having contributed to the construction of the platform. With Pega, we can rapidly integrate the value chain and develop that complete view of the policy holder. From that view, we can develop informed personas of policy holders and potential policy holders. And, leveraging Pega's Customer Decision Hub, we can complete the feedback loop to further inform our underwriting decision-making process based on scientific propensities for claims costs.

While leveraging begins with the decision hub, we can further extend the capabilities and gain accelerated ROI through robotics implementations to breakdown ETL silos, we can explore the process gates where human interaction creates errors and we can remove the cascading effects those errors may cause. We can also take these new and cleaner data points to have our systems learn the behaviors of our customers and make smarter decisions about the kinds of processes we would typically in the past pull them through. Finally, we can look at the new data and clarity of that data and explore new methods of claims processing and resolution and find that spot between customer satisfaction and business objective that makes for the proverbial win-win scenario.

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