My Top Considerations For Reinsurers Looking to Improve Digital Processes
Sven Scandella
Independent Consultant, helping reinsurers with their technology solutions - outcome focussed
Reinsurers are facing increasing pressure and reason to incorporate technology in order to remain competitive and efficient in the market. However, as we know very well, the process does not come without challenges and this requires careful consideration. When I work with clients, there are usually some key areas where action is needed. In this article, I thought I would share these areas and a little about why it’s important to work on them before converting processes digitally.?
Business alignment and understanding
It's important for the IT team to be closely aligned with business. This proves true in general but becomes even more important when adopting new technology for business processes. This alignment ensures clarity on who supports claims and technical accounting operations, establishing dedicated teams rather than shared ones. Also, there should be clear accountability for operating and enhancing business systems and processes on the IT side.
In my experience, there’s an opportunity to enhance the collaboration between IT and business/reinsurance teams. While not all IT personnel need in-depth business process knowledge, having a few team members with this knowledge can make a big difference. AppDynamics recommends demonstrating the shared values of business and IT as a good approach to bridging this gap. Although it may seem challenging at first, one practical step could be for the IT team to shadow business colleagues for a few days. Encouraging a team mindset open to ideas like this can truly drive progress.
One key area where we can enhance our effectiveness is in fostering a more collaborative approach within the IT team. By embracing the role of IT as enablers of the reinsurance business, we can better align with the company's goals. When IT teams adopt a supportive and solution-oriented attitude, they can provide valuable insights and guidance without imposing restrictions or resisting requests. By emphasising proactive engagement and mutual understanding between teams, collaboration will work better and progress can be made.
Solid day-to-day operations
With the above in mind, the primary focus of IT should then be ensuring the smooth and correct functioning of day-to-day operations within the reinsurance business. A core part of this has everything to do with data. Data quality issues are not a new struggle for any business. LLC Buddy states that up to 47% of data collected by businesses has one or more critical errors. With this in mind, data quality issues should be prioritised and resolved promptly. Fortunately, with the right focus and collaboration, these challenges can be addressed efficiently.?
One key to success is ensuring IT teams are deeply engaged with and understand business operations, as discussed above. While it might seem that outsourcing could solve any issues of misunderstanding by providing specialised external expertise, this approach can actually dilute internal knowledge and hinder long-term growth. Instead, by working on a combined team that values both day-to-day operations and new developments, businesses can create a balanced environment where innovation thrives and client satisfaction is consistently achieved.
Focus on delivering a few things well
It’s not unusual for change to happen frequently within any business, shifting priorities and adding to the difficulty of delivering results. In fact, Cioindex states that it’s fairly inevitable that industries, tools and internal environments are constantly changing. This can lead to a perpetual state of misalignment and incompleteness between businesses and their IT departments..?
Nevertheless, some change is inevitable. Issues only arise when priorities are chopped and changed so frequently that nothing is achieved. For example, in one project I supported, the automation goals were ambitious, which is fantastic, but unfortunately, the focus on priorities wavered. This led to delays in critical elements, which affected the rollout and increased efforts for claims operations. To avoid such challenges, the whole team should focus on delivering a few key projects with excellence, rather than excitedly spreading resources too thin across many initiatives. By concentrating on the most impactful projects, IT can drive significant success and strengthen the alignment with business goals.
Combining business analysis and development resources
To enhance the effectiveness of IT setups, it’s essential to align business analysis and development resources under a single leader. By focusing on business needs and working collaboratively, IT can play a pivotal role in this. Thus, integrating business analysis and development into a unified team encourages mutual understanding so that businesses can achieve collective success rather than isolated challenges.
When these disciplines collaborate closely, the team is better positioned to deliver exceptional results. IT architects, while crucial, should work in harmony with business requirements, ensuring that their expertise supports, rather than dictates, the process. By embracing this balanced approach, we will be well on our way to creating a more cooperative and efficient claims ops environment for all involved.
Establishing a dedicated reporting team
Reporting is a significant pain point for many reinsurers. Despite company size and complexity, even the bigger players lack reports that support day-to-day business operations and meaningful data for performance monitoring. In his article ‘Reinsurance Data: Struggles and Solutions’ Tom Spier suggests that while emerging technologies offer great promise, the reality is that most reinsurers stick to outdated methods of data collection and management. He goes on to say that reinsurers often work with “the lowest common denominator of data due to missing information and a low level of confidence in the data they do receive”. Whatsmore, in many cases I have witnessed that despite raising these issues with senior leadership, businesses and tech teams often have a lot going on so prioritising yet another thing can prove tricky.?
It may feel like progress is slow because of this, but there is still tremendous potential in BI tools and by collaborating closely with IT, the potential value to be gained from persevering will be uncovered. With the right focus, reporting processes can and will improve.
Having a dedicated reporting team with clear ownership and accountability can do wonders. This team should leverage new technologies effectively, focusing primarily on business needs. A balanced mix of internal and external resources, with a keen eye on costs, is crucial for delivering a great user experience and valuable business insights.
Evidently, it’s not JUST about technology?
As has hopefully been made obvious by this article, successfully implementing technology into business processes requires more than just new, shiny technologies. It demands a deep understanding of business needs, a focus on solid day-to-day operations, effective project delivery, integrated teams and dedicated reporting resources.?
Would you like to learn more about how to realise them at your company??
Let’s talk about it. Get in touch here: https://www.buondrius.com/contact?
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