However, what can seem on the surface to be a set of fairly standard processes can soon become overly bureaucratic, inefficient, and resource-intensive. That’s down to the number of variables at play, like the exact type of insurance, the distribution channel, and the category of coverage.
How to improve insurance policy administration with Celonis
At the core of any good insurance operation is the ability to quickly and efficiently process new policies while renewing existing ones — and providing end-to-end servicing of submissions and policies.
Insurance inefficiencies in the policy lifecycle
On top of that, existing policy administration applications can come with added complications like customer location and product customization. That’s a lot to handle, and it results in inefficiencies popping up throughout the policy lifecycle.
According to McKinsey, insurers are not doing a great job when it comes to tackling these inefficiencies and reducing administrative and operating costs. McKinsey reports: “Between 2014 and 2019, expense ratios fell for only 45 percent of global P&C carriers… That’s a disappointing outcome for an industry that has communicated so much on the need for productivity improvements.”
Scaling through acquisitions creates complexity
Adding to stubborn costs is growing complexity. As segments of the insurance industry have tried to scale operations through acquisitions, the bulk of insurance firms have increased their operational complexity. That makes intended change initiatives, originally meant to smooth out acquisitions, even more difficult to manage – and more expensive.
In a lot of cases the solution would be to modernize the administration systems and make them more digital-centric. That won’t work here because the age and complicated nature of insurers’ systems typically means they will not play well with the newer functionalities of data tools. In fact, it would make it much more difficult to create a realistic and workable plan. Imagine trying to drive a bus and change all four tires at the same time – don’t try this at home (or work).
An insurer roadmap with key functions to automate
Instead, insurers need a strategy roadmap that lays out which key functions in the policy life cycle should be automated. This is where Celonis comes in.
Leveraging the Celonis Execution Management System (EMS), insurers can reveal and fix inefficiencies in the policy intake workflow.
That requires understanding the base processes, which is made possible by the process mining at the core of the EMS. Process Mining provides an X-ray of how the process runs — giving insurers comprehensive, real-time visibility over their business.