The insurance industry is facing rapid change, competing priorities, and a brittle and costly legacy. Agent-heavy firms are least likely to explore digital opportunities, as their familiar hunting-grounds degenerate into commoditized markets. Insurers must embark on a transformation journey by leveraging their legacy investments to create an agile enterprise and focus on omni-channel customer experience and customer intimacy with goals to acquire, service, and retain. The provocation of this urgent need to transform is threefold:
These market conditions compel insurers to shift left. The focus must shift left from the back office to the front office in response to these pervasive conditions to meet several key objectives:
Insurers need to address these strategic imperatives in a way that will scale with flexibility and sustainability. The acquisition and constant tweaking of a monolithic policy administration system is not the answer. As a matter of fact, that approach perpetuates the problem because if you purchase a solution that solves all your problems as long as you just tweak these 10 minor things, eventually those minor things will become significant enough to find a replacement. The objective should certainly be to extend the life of existing policy administration investments and to potentially replace legacy enterprises and improve operations and customer service. This can be done with the adoption of a pace layering strategy This approach essentially creates a taxonomy of processes and capabilities to liberate business process and customer interactions from the confines of some software vendor's vision of how insurance ought to function.
Adopting a pace-layered strategy decouples processes and business rules from underlying applications. Business and IT can work together to RAPIDLY define, configure, maintain, and tune insurance business processes and rules in 'Systems of Differentiation' decoupled from 'Systems of Record' such as existing policy, claims, underwriting, and additional network applications and systems (e.g. DuckCreek, Guidewire, SAP, Seibel) to protect the aging investment or depreciate elements of the legacy. And to keep pace with disruption in the industry, more agile capabilities can be expressed in 'Systems of Innovation'.
We have identified Pega Digital Process Automation (DPA) as the most comprehensive enabler of these 'Systems of Differentiation' and 'Systems of Innovation'. Pega's robust blend of process automation, decision analytics, and robotic automation will enable insurers to most effectively shift left by throttling submissions with straight-through-process, decision automation, and cognitive robotic digital workforce.
Pega DPA is uniquely positioned to deliver these strategies and move the focus to an adaptive customer-centric front office through increased back office automation.
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