The digital transformation of output management can save time and money. Swiss insurers have recognized this advantage but are surprisingly far from reaching the goals they have set for themselves.
In the most comprehensive study to date of output management in Switzerland, Inacta evaluated data from nine leading Swiss insurance companies (you can request the summary of the report here (in German only). In total their annual premium income amounts to more than CHF 30 billion, and they are leaders in their respective lines of business – property-and-casualty (P&C) and health insurance.
Unsurprisingly digitalisation is very much a hot topic among the insurance companies surveyed; their plans and goals relating to digitalisation are reflected in their answers.
What is surprising, however, is how far insurance companies are from the digital goals they have set for themselves. Although the number of emails sent continues to increase, the volume of paper that is sent is not decreasing at the same rate. Furthermore, the majority of emails sent to policy holders includes digital paper documents in PDF format.
However, there is still significant potential to improve communication using a customer portal. On average, considerably less than 10% of current mail is sent using this channel. With the exception of a few isolated projects, modern communication channels such as messenger are not being widely used by the general public. Insurers need to prepare themselves for this challenge – how long do they want to live with this disadvantage, in the face of disruptive new competitors from the insurtech world?
Another finding of the benchmark study shows what might be an important reason for the current situation – only a fraction of insurance companies routinely program the output templates in their systems so that they can extract information from them and produce documents such as insurance policies in whichever format they require (HTML, pdf etc). This type of improvement is not only necessary for the comprehensive digitalisation of customer communications, but is also recommended for the production of hardcopy documents. This is because using specific templates for complex documents such as insurance proposals, significantly increases efficiency between insurance companies’ specialists and their IT implementation teams.
With new output channels, this improvement is of even greater importance because ‘omnichannelling’ also needs to be reflected in IT specifications. In addition, because electronic channels are continuously being developed, corresponding output templates also need to be adapted frequently. To ensure this, seamless cooperation is indispensable between insurance specialists, IT and any service providers involved.
The benchmark study clearly shows the impact if specifications are not used systematically: insurers who state that they are ‘not at all’ or ‘not satisfied’ with their specification process are those who do not use any relevant tool support at all at the moment, i.e. neither MS Word nor a structured framework.
Outsourcing with savings potential
The concept of pursuing an outsourcing strategy involving business processes meets with some reservations. A company’s control over the content and management of customer communication is critical, but this may be called into question in the face of increasingly standardised IT systems. A breakdown of the average cost for generating output, excluding postage, shows that the lion’s share goes towards printing costs. However, as digitisation progresses, the focus shifts to the on-going maintenance and development costs for the output management systems used. Economies of scale could create the potential for further cost savings.
This is a software platform that is used for the creation of individual correspondence as well as mass output. It takes over the creation of the output as well as post-processing – such as sending a communication to a social media channel. However, only a minority of the insurance companies surveyed had this One-Platform IT architecture for output management.
The advantages of one-platform architecture are well-known and aren’t just about lower operating costs. If, for example, further automation is pursued, output that is currently created individually by employees would also have to be created automatically in the future.However, without One-Platform architecture, a platform change, such as to the batch platform, would have to be made. The batch platform would then enable the automatic creation of customer communication. Any change of platform would involve considerable additional work, as existing templates for individual correspondence would need to be recreated on the new batch platform. This would present a fairly significant early obstacle to change and would also require increased coordination.
However if One-Platform software were used, it would take charge of both tasks, and this move to automation could only involve a few steps, making it considerably more efficient. It would also make a move to automation more likely.
Conclusion – a move towards true omnichannelling
Even taking the individual situations of the participating insurance companies into account, the benchmark study gives a clear picture of the future of output management – a move towards real omnichanelling, using structured, tool-supported output specifications when the end results of the promised advantages will become apparent. The basis for this is a powerful output platform offering a high degree of future security, provided by a service provider, mostly on an outsourcing basis. The insurance company participants will be implementing this future scenario from different starting points. However, the vast majority have recognised that the writing is on the wall, and are already at different stages of transformation programme implementation.
You can request the summary of the report here (in German only)