Why Operational Technology is Essential for Future-Ready Brokers
Technology | Dan Narayan Vice President – Business Development, Exdion | Aug 18 2022
Sponsored content from Exdion
Inflation, revenue pressures, increasing operational costs and a talent crisis are only a few of the challenges that brokers face today. Operational excellence is critical to overcome these issues. Brokers must control rising costs, recruit the needed talent in a changing work environment, and respond to client demand for improved coverage, lower premiums, and higher limits.
More importantly, brokers are under increasing pressure to further develop a more productive and value-added relationship with their clients.
Technology has become the way for brokers to become future-ready and respond to these trends. The automation of operational processes is key to meeting these challenges. Technologies including digitization, artificial intelligence (AI), machine learning (ML) and natural language processing (NLP) are giving brokers new tools that were unavailable only a few years ago.
Prior to these technologies being available, brokers turned to outsourcing to solve the problem. However, outsourcing is simply moving manual operations offshore and offered none of the advantages of the new technology. Outsourcing is also less attractive today because of business disruptions caused by the pandemic and increased political risk. Emerging Privacy laws like CCPA with emphasis on protecting client data are likely to make it more difficult to outsource process.
Smart technologies like AI and ML are also making it easy for CSR’s and AM’s by taking over repetitive data crunching and mundane tasks so that they can spend more qualitative time on client facing, revenue and customer satisfaction-impacting tasks. The Great Resignation and post Covid-19 induced resource crunch that has hit the Insurance broker industry too is unlikely to end soon, so the time and skill of these valuable employees must be directed to the highest value tasks.
Brokers are now transitioning from manual operations to automated processes. These new digitized processes streamline operations, improve employee productivity and lower operational costs. They also reduce the risk of mistakes, ensure accuracy, and reduce operational turnaround times.
The most important result of operational automation is that it enables brokers to quickly respond and smartly engage to build deeper customer relationships.
Clients today expect brokers to show operational excellence with automation and digitization. Clients also have higher expectations for improved customer service with emphasis on timeliness, thoroughness, accuracy, and fast turnaround time. Continued use of manual processes makes it impossible to meet these new client expectations.
Moreover, customers today know the potential of digitization in the insurance process – they see it every day in the personal lines market with automated placement, pricing, and claims. Why have commercial insurance brokers lagged their personal lines’ brethren? Maybe because technology options were just not as available. And, in realty, personal lines are usually less complex than the operational processes of commercial brokers.
Commercial brokers and broker technology vendors now offer far more sophisticated data analytics because of increasing digitization. Technology can offer insights into a client’s risk that were not available in the past. New policy data analytics, based on the improvements in operational technology, are emerging in real time.
In the past, these kinds of operational improvements - if they were available at all - would have required a large capital investment. Financial risk and ROI considerations of an upfront investment limited many brokers’ adoption of these technologies. Today, however, the technology decisions have become less risky and more affordable as these solutions are offered as an operating expense by strategic technology partners and also directly integrated with existing management systems.
Exdion Policy Check and Exdion Quote Compare
For decades, brokers depended upon customer service reps to manually check the final insurance policy for mistakes, errors, and accuracy. The processes are cumbersome, time-consuming, subject to substantial broker E&O risk, and difficult to implement in a timely manner. A single policy with more than a hundred pages of text needed to be checked against five or more documents like submissions, ACORD forms, quotations, endorsements, etc. Huge backlogs of six months or more developed as brokers tried to complete hundreds of policy checks.
Enter automated policy check. Using AI and machine language on digitized policies now take a few seconds. CSRs can correct errors that the policy check discovers quickly. The savings in processing times and increased accuracy has radically changed the policy checking operations of brokers.
Next in line for automation is the quotation process. Quotes can be gathered, data conveniently displayed and the best options for clients quickly and more easily discovered. The quotation technology also enables new analytics – analytics that are designed to serve the needs of the client be it a risk manager or a CFO. All of these technologies tightly integrate with Applied AMS allowing seamless implementations.
The net result: these technology innovations give brokers new tools that can meet customer expectations and dramatically improve broker operations.
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