How tech is transforming the world of insurance

Insurance makes things happen. It protects us from the risk of something going wrong with our cars, our homes, our property or our health. Insurance frees businesses from risk – while managing the impact if problems do arise. Technology is rapidly changing the world of insurance. A new generation of insurtech businesses are revolutionizing traditional insurance practices, and even traditional insurance insurers are beginning to face the digital future.

Technology creates almost unlimited new opportunities. It is not unusual now for insurance providers to offer insurance by the hour, with premiums based on detailed location and usage data from car black boxes, smart watches, or drones. Meanwhile, our increasingly connected physical universe, and the so-called Internet of Things, enable real-time monitoring of everything from the contents of your fridge to fire and flood risk.

My journey on the road that led me to the intersection of insurance and technology began in Japan back in the 1980s. I went there from Ireland as a young man on a government-backed program to gain experience in the most dynamic technology economy in the world at the time. The years I spent in Japan left a lasting impression. They instilled in me a mindset focused on quality and service that informs everything we do at DOCOsoft to this day.

Since we founded the company 15 years ago, we have gone from providing document management software to the more complex insurance claims management systems that we now specialize in. The combined dedication to innovation and engineering excellence I experienced in Japan helped us compete and win against the largest technology companies. As an independent company, with no outside investors to please, we are free to do things on our own terms and remain completely focused on our customers.

We provide end-to-end solutions to global insurance companies such as Munich Re, Chubb, Hartford and SCOR. More than 30 per cent of Lloyd’s managing agents use our claims management systems, representing £15bn of premium income. We processed almost £10bn in claims payments in the 2021 calendar year, with almost half of all claims messages in the London insurance market passing through our platform.

When a claim comes in from a customer, claims managers need to check it against the appropriate insurance and a list of other information to see if the claim is payable. Our systems integrate all claims management needs into one dashboard, making the entire process faster and eliminating manual errors. We are finding ways to automate tasks that add minimal value to the claims process. We use artificial intelligence and machine learning to improve process efficiency and enable data-driven analysis and decision-making.

Much of what we do in practice is about making our customers’ systems integrate and interoperate with other systems and marketplaces. Using application programming interface (API) software, we can interface with external applications, importing data from various sources to inform and empower the claims management process. In the future, Open APIs will greatly reduce the time it takes to connect to external systems, build separate functions like Lego bricks to create systems that are greater than the sum of their parts.

For example, the topic of sanctions has been in the news recently, and our claims management platform links to an official list of people and organizations subject to sanctions. This means that when a claim comes in, claims managers can quickly see if the beneficiary of any payment is on the penalty list (if so, the claim cannot be paid) without having to leave their dashboard to check the lists manually. This speeds up the process and eliminates the risk of a wrong key or other user error.

Cybersecurity is a large and rapidly growing risk area for all companies and organizations. Insurance companies have stepped up to provide insurance against such risks – but they are facing challenges. Premiums have risen sharply with the recent increase in hackers and state-sponsored cyberattacks since Russia invaded Ukraine, making cyber risk increasingly difficult to manage and, from an insurance underwriting perspective, to price accordingly.

The reach and potential impact of cyberthreats was clearly demonstrated by the recent alleged cyber attack on Lloyd’s of London – an institution at the heart of the global insurance market. We know very well how important it is for our systems to be secure. Many companies are still using outdated legacy systems. Older on-premises hardware is particularly vulnerable, while more cloud-based systems are better secured and supported. Ultimately, insurance companies need to focus on their core business and outsource their expertise to experts like us, with their back-end systems hosted in the cloud.

Technology is opening up a world of new opportunities, but insurance businesses need to take a long-term look at what they hope to use the technology for – and the associated implications in terms of costs and benefits, risks and rewards. We work closely with our insurance clients, helping them get the best value for money from the right technology solutions. The insurance industry needs to embrace the power of new technology, but you have to do so with your eyes open. That way, insurers can increase efficiency and profitability, while generating a competitive advantage by providing outstanding customer service.

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