Maximizing efficiency: how digital data collection is changing insurance workflows

Traditional insurance workflows include a wide range of processes, including customer onboarding and experience, risk assessment and underwriting, and policy management and renewals.

Typically, conventional workflows involve drawn-out, inefficient manual processes and extensive paperwork, and are laden with challenges:

• Time-consuming: Manual data collection and entry slow down the entire insurance cycle.
• Inconsistencies: Manual processes and document handling lead to inaccuracies, often affecting downstream operations like risk assessment and policy pricing.
• Limited customer engagement: The paperwork load involved in manual processes makes it difficult to scale personalized customer interactions. 
• Inflexibility: Conventional methods make it hard to adapt to evolving regulations, market conditions, and customer needs. 
• High operational costs: Traditional workflows are labor-intensive, resulting in high overheads for manual labor, document storage, data verification, and error corrections.
• Data silos: Storing information across multiple systems or physical files can create communication barriers, often causing bottlenecks and delays.

By using technology to gather, process, and store data electronically, insurance companies are moving away from the traditional, resource-heavy workflows above. 

This shift towards digitalization is revolutionizing operational efficiency and customer experiences. According to Harvard Business Review, a well-implemented digitization program can lead to a 90% reduction in turnaround time for key insurance workflow processes.

Digital data collection addresses the key challenges associated with manual workflows, allowing insurance companies to scale while also becoming far more agile, enabling them to:

• Hyper-personalize offerings and customer interactions
• More easily implement regulatory changes
• Ensure data consistency 
• Provide relevant users with real-time access to consistent data, reducing errors, bottlenecks, and delays
• Quickly respond to changing market needs

Digital data collection in the insurance industry is completely redefining the standards of efficiency, accuracy, and customer service, playing a crucial role in accelerating and streamlining workflows. 

Key areas impacted by digital data collection

Here's a look at the key areas profoundly impacted by digital data collection.

Customer onboarding and experience

Digital data collection streamlines customer onboarding, making the overall experience fast, easy, and convenient. For example, an automated, personalized customer journey for an application process might look something like this:

1. Online information gathering
   Customers fill out an online form expressing interest in a policy or service, including preliminary information such as their name, contact details, and other relevant data.
2. Automated analysis and data entry
   - Based on the customer profile and needs, the system suggests a suitable insurance product or request that the customer fill in a more detailed online questionnaire.
   - The customer details are also automatically updated in the insurance company’s CRM system.
   - If the request requires an agent’s attention, the customer is automatically assigned to an agent. 
3. Digital document submission
   The customer receives an online prompt (via email, SMS, etc) to upload specific documents via the insurance company’s website or app, e.g., identification, proof of income, and other relevant documentation. 
4. Automated verification
   The system automatically checks that the information is complete and the documents are valid.
5. Risk assessment
   The insurer’s backend system processes the submitted information to assess risk. This might be 100% automated for more simple insurance offerings, or the algorithms can be used by the Underwriting team to augment their decision-making process (see the section below on Risk Assessment and Underwriting).  
6. Policy quotation, customization, and finalization
   A quote is automatically generated and sent to the customer. The customer can customize their policy coverage and select add-ons (a great opportunity for cross- and up-sell). The customer then consents to the terms and signs the policy digitally using an e-signature. 
7. Payment setup
   The customer sets up payment through a secure digital payment gateway, that’s integrated into the insurer’s platform.
8. Policy issuance and onboarding communication
   Once payment is confirmed, the policy is issued automatically via email or through the app. The customer also receives additional information, including contact information for support, additional services available, and further instructions if necessary. 

This type of automatic workflow accelerates the application process, removing bottlenecks and delays caused by backlogs. Automated processes like this are customer-centric, seamless, fast, and hassle-free process, resulting in improved customer satisfaction and higher retention rates. In fact, according to PWC, 41% of consumers claim they’re more likely to switch providers due to a lack of digital capabilities.

Risk assessment and underwriting

The integration of big data and advanced analytics is transforming underwriting workflows. According to CapGemini, 82% of survey respondents (comprising 242 underwriters and 220 members of the Chartered Institute of Loss Adjusters) said they believe those insurers that don’t capture the potential of big data will become uncompetitive. 

This data-driven approach uses machine-learning algorithms to analyze large amounts of data from various sources, including digital data collection, social media, IoT devices, and public records. 

This, in turn, gives insurers a better understanding of potential risks, allowing them to accurately and quickly assess risk and calculate more precise premiums and policy terms.

In addition, the near real-time, granular data provided by digital data collection also improves risk assessment for each customer, allowing insurers to offer their customers more personalized pricing and potential savings. 

Claims processing

Many insurers are automating their claims workflows, with digital data collection, AI, and machine learning as the key factors allowing for a smooth, customer-friendly experience that reduces the manual touchpoints and accelerates the entire claims process.

An automated claims workflow using digital data collection and AI/ML could look something like this:

1. Data collection following an incident - The customer uses their insurer’s app or website to enter relevant details regarding the incident, such as time, location, circumstances, etc., as well as evidence, such as photos or videos. 
2. Claim registration - The system automatically registers the claim, assigns a claim number, and sends an email or message to the customer acknowledging receipt.
3. AI-driven assessment - AI algorithms analyze and validate the submitted information. The system also checks for potential fraud by comparing the claim to historical data patterns.
4. Communications and updates - Customers receive automated updates regarding their claim status.
5. Integration with adjuster’s workflow - If human assessment is needed, the claim is assigned to an adjuster. Adjusters use digital data and AI algorithms to make more informed decisions.
6. Decision and automated payouts - Once a claim is approved, the system automatically processes the payment to the customer’s bank account. If necessary, the system can direct payment to a service provider (for example, in the case of auto repairs). 
7. Customer feedback - Once the claim is settled, customers can be sent a request for feedback via a digital survey. 

Policy management and renewal

Digital platforms simplify and streamline the traditionally complex tasks of updating and renewing insurance policies.

Customers can now log in to user-friendly portals or apps to review their policy details, make changes, or renew their coverage with a few clicks. This isn’t only convenient and simple - allowing policyholders to manage their details directly reduces the risk of miscommunications, errors, and outdated information. 

Digital platforms also play a key role in offering personalized customer service by providing comprehensive, consistent data. Insurers can analyze customer interaction data, policy change requests, and renewal behaviors to gain insights into individual preferences and needs, allowing them to tailor communications and offers. For example, as a renewal date approaches, the system can automatically generate personalized reminders with customized policy recommendations based on the policyholder’s history and preferences. Advanced analytics help take this personalization even further, allowing insurers to predict when a customer might benefit from additional coverage, and automatically offering them cross-sell or upsell options.

Benefits of digital data collection in insurance workflows

Digital data collection in insurance workflows offers numerous benefits:

• Increased efficiency and productivity: Digital tools automate many of the time-consuming manual processes involved in data collection and entry, speeding up workflows and freeing staff to focus on higher-value tasks.
• Enhanced accuracy and reduced errors: Digital data entry and processing significantly reduces the amount of human error that can occur with manual data handling.
• Improved customer satisfaction and engagement: Digital platforms give customers fast and easy access to services and information, improving their overall experience and interactions with the insurer.
• Cost savings through automated processes: Automation reduces the need for manual labor and paper-based processes, which translates into substantial cost reductions.
• Better data quality and streamlined workflows: Digital data collection ensures that data is up-to-date, consistent, verified, and easily accessible, leading to more efficient operations and decision-making.
• Agent preference: Digital data collection improves turnaround times, and a study by ZS Associates and Insurance Networking News showed that agents prioritize carriers that offer quick turnaround times over those with competitive product offerings and commission rates. 

Embracing digital transformation: The future of insurance

Embracing digitalization is already a must for insurers, allowing you to keep pace with current technological advancements and positioning your business for future growth and competitiveness. 

Within that realm of digital transformation, digital data intake is far more than just an incremental improvement - by addressing the challenges and inefficiencies of traditional workflows, it’s the missing piece for maximizing efficiency within the insurance sector, offering a roadmap towards a more agile, customer-centric future.