
After decades of good, incremental change management, the insurance industry finds itself today at a crossroads.
According to a report from McKinsey, “Tech-driven insurers: How to thrive in 2030,” real pressure for big change within their operating models looms heavily over the insurers. This pressure comes as a result of both external and internal forces: changing customer expectations, intensified competition, and growing complexity in the insurance environment. Legacy systems and manual processes are no longer a viable answer. Instead, the call is to rethink every operation of the insurer’s business model, even how they service policies.
The fundamental shift requires a new approach in policy servicing where customer experience, operational efficiency, and risk mitigation take center stage. How do insurers deliver more value to customers and distributors while driving the bottom line and exploiting vulnerabilities lying within antiquated and, for the most part, manual processes?
This article goes over how ServiceNow’s FSO solution could be a powerful catalyst for change in the policy servicing experience, empowering insurers to address these challenges while thriving for the future. The capabilities of ServiceNow FSO can unlock a new era for the insurers—an era of agility, automation, and customer-centricity for their policy servicing operations.
What Are the Main Challenges of Policy Servicing in the Insurance Sector?
- The Weight of Technical Debt
Traditionally, the insurance industry has been conservative, opting for stability rather than agility. In this regard, companies become constricted in a cycle where fear of disruptively existing operational workflows stifles progress. As such, there would be a reluctance to introduce new tools or technologies into service processes that would better their structures, foster customer experience, and help with better decision-making.
Many insurers are burdened by homegrown legacy systems and rigid mainframe architectures. These systems, built over decades, are often inflexible and difficult to integrate with newer, more agile technologies. This “technical debt” hinders experimentation and innovation.
- Low-Tech General and Administrative (G&A) Processes
What presents major inefficiencies in the modernization process? A dependence on paperwork and spreadsheets. It also traps insurers in redundant data entry processes that generate errors, inconsistencies across core systems, and fragmented views of policyholder information.
G&A functions include finance, HR, legal, compliance, and others, accounting for high percentages of operating expenses: 28% in life insurance, and 19% in property and casualty insurance (P&C), for instance. Inefficiencies generated from legacy administration systems mean wasting huge amounts of financial resources on the management of processes that can be automated or made more streamlined.
- Managing Costs in a Challenging Economic Climate
Finally, insurers are struggling with expense management across their organizations. More recent external factors that have an impact on the bottom line include rising inflation and increasing regulatory costs.
With the rise in inflation and with no indication of rising interest rates, there may not be enough reasons for the insurer to exit profitably. Also, where pressure to invest in new technologies is increasing, pressure to control costs sits ill at ease with the insurer today. So, most insurers walk this tightrope between investing in innovation to improve policy servicing but also keeping total costs manageable.
How ServiceNow FSO Transforms Policy Servicing Experiences?
- The Power of Digital Workflows
The insurance industry is experiencing a digital revolution and FSO is at the forefront of the transition. Therefore, using digital workflows, FSO allows insurers to work more efficiently and enhance policy servicing experiences for customers and employees. With ServiceNow FSO, all those slow and inefficient manual processes are now things of the past. Information flows freely among carriers, distributors, and customers at high speed with no scope for flow and frictional delays.
- Enhanced Transparency for Sales Agents
Unlike earlier days when communication between the carriers and distributors was largely isolated and relatively time-consuming, with FSO, the sales agent of a distributor can now get greater visibility of a carrier’s action during the application process by the customer. This builds in better communication with the customer so that frustration about being kept waiting or potentially a misunderstanding may be avoided. Agents can do this with confidence, and customers can sleep peacefully at night knowing there are updates in the works, and their concerns are being heard, making for a much smoother and more satisfying customer journey.
- A Simple, Digital Interface for Customers
ServiceNow FSO also gives the power of policy management directly into the customer’s hands. And, for this reason, customers are empowered with a simple and digital interface for requesting changes or updates to policies or even to file claims. This streamlined approach eliminates the complexities usually associated with the older, traditional methods. FSO simplifies ease of use and accessibility, thus enabling the customer to be much more satisfied and, in turn, loyal.
- Boosting Employee Productivity
ServiceNow FSO goes beyond enriching the customer and distributor experience to freeing employees from tedious and manual work. FSO automates routine processes, including data entry and document management, which frees the employees to spend time on higher-value activities, such as complex policy analysis and dispute management. Such a shift has an overall effect of increasing employee productivity.
- Driving Growth in Underwriting Capacity
Finally, the bottom line is serviced favorably. Increased capacity and productivity of underwriting activities—empowered by automation and streamlined workflows from the platform—can directly impact an insurer’s ability to write new business and retain customers already in its portfolio, making for higher direct written premiums and a healthier, more sustainable revenue base.
Conclusion
ServiceNow FSO has emerged as a game-changer for insurers who face challenges in policy servicing. It transforms digital workflows to make things more transparent, drive productivity, and change the customer, distributor, and employee experience for the better. In such transforming landscapes of insurance, the adoption of platforms like ServiceNow FSO is important for gaining competitiveness and meeting modernizing customer expectations.
Is your insurance company ready for such a transformation in its policy servicing experience? Xceltrait, a ServiceNow Services Partner, is here to help you transform your operations:
- Streamline your policy servicing processes with digital workflows.
- Enhance transparency for sales agents and customers.
- Boost employee productivity through automation.
- Drive growth in underwriting capacity.
Don’t let legacy systems hold you back. Contact our specialist today to see how this powerful solution can help you in your unique circumstances and position your insurance company for long-term success in the digital age. Take a step closer to an agile, efficient, and customer-centric future—your policyholders and bottom line will thank you.