DIGITAL TRANSFORMATION MATTERS
A Q&A for Insurers
Explore why and how innovative insurtech is key to success
With the latest digital technology, insurance companies of all sizes are transforming their operations to both tackle current challenges and drive growth in the future. But what makes innovation so important for today’s insurers – and which obstacles can stand in the way? Our insurance expert, Nick Dunn, discusses the meaning of digital transformation for a fiercely competitive industry.
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Market volatility is another challenge you referred to. How are insurers coping?
What about cost? Can the average insurer afford a new payments solution?
You mentioned the growing risk of payments fraud. How can a single treasury solution help?
How can insurers simplify payment processing?
What’s making treasury management so complex for insurers?
How can digital transformation help with growth, efficiencies and cost savings?
What role can today’s treasurers play in their company’s success?
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What’s the top reason for insurers to digitize their operations?
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INTRODUCTION
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Vertical Growth Director, Financial Services and Healthcare, FIS
Alex Orechoff
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Insurance is a product you buy that you hope you’ll never have to use – and filing a claim can be stressful. So, insurers need to make the policyholder experience as positive as they can. Customer channels must be as good as the best-in-class offerings you’d expect from a ride share or a neo bank. If you can summon a cab or transfer money across borders in seconds, why not expect the same from insurance claims? And fear not: digitizing channels can not only streamline communication to optimize the customer experience but also save insurers money.
CUSTOMER EXPERIENCE
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Digital channels not only give consumers speed and convenience but also help insurers streamline communication and reduce costs. And by improving access to data, digitalization enables firms to better understand their customers, personalize their experience and drive loyalty, too.
Insurance Vertical Lead, FIS
Nick Dunn
PREVIOUS QUESTION
Insurance is a product you buy but hope you’ll never have to use – and filing a claim can be stressful.
So, insurers need to make the policyholder experience as positive and customer-centric as possible, with fast, flexible options for premium collections, claim processing and payouts.
What stops insurers from pursuing digital transformation?
RISKS VS. RESOURCES
Digital transformations can be heavy lifts for firms, who have struggled to retain IT talent and knowledge since the Great Resignation. Given the multitude of new insurance solutions, there’s also the fear of betting on the wrong technology. These are no reasons to stand still, however. If you avoid updating your solutions, the customer will eventually demand it and competitors will steal your market share. My advice is to work with tech partners that understand all the options and will help you drive innovation.
My advice is to work with tech partners who understand all the options and will help you drive innovation.
Business Executive, Corporate Liquidity, FIS
Thomas Jerolitsch
Digital transformations can be heavy lifts for firms who have struggled to retain IT talent and knowledge. Given the multitude of new insurance solutions, there’s also the fear of betting on the wrong technology.
These are not reasons to stand still, however. If you avoid updating your solutions, you’ll struggle to serve customers as they want to be served and competitors will steal your market share.
How can digital transformation help manage costs?
How can digital innovation help with rising inflation?
MORE SAVINGS AND SALES
As costs of repairs and labor increase faster than insurers can raise prices, automating as many processes as possible will help firms gain economies of scale and reduce overhead. First, insurers must use their data on claims to identify opportunities for scale. But as well as reducing manual processing costs and errors, adopting digital processes, especially for payments, helps improve the customer experience – by making policies easier to purchase and maintain. With customer acquisition costs sky high in insurance, you don’t want to lose a potential policyholder just before a purchase, only because their payment method needs updating.
STREAMLINED OPERATIONS
As costs continue to rise, complex, fragmented and heavily manual insurance operations become all the more expensive. Through digital transformation, insurers are not only increasing automation but also consolidating and simplifying their systems to reduce overhead and gain economies of scale. Another way that transformation can save you costs is by changing the way you run your technology. With managed services, for example, it’s possible to outsource your technology requirements to an expert vendor and shrink both your internal IT footprint and your total cost of ownership.
Why are digital tools critical for managing risk and compliance?
What opportunities does embedded finance offer insurers?
VALUE BEYOND INSURANCE
The most obvious opportunity is to embed insurance products in other shopping experiences. Although insurers have long distributed products through partners, the frictionless element of embedded insurance increases the odds of binding policies and targets the ideal risk profiles. But additional forms of embedded finance can help insurers deepen their relationships with new revenue streams. When property is damaged, an embedded lending service could help policyholders buy a better vehicle or make a home more resilient. And with embedded banking services, you could even improve suppliers’ access to capital – encouraging the best suppliers to prioritize working with you over others and better service your customers.
VISIBILITY AND CONTROL
In these uncertain times, it’s more important than ever that insurers get a clear, up-to-the-minute, totally accurate view of their cash flows and investments for risk management, regulatory reporting and decision making. Poorly connected legacy systems and spreadsheets simply can’t deliver the level of visibility and control that’s required. But with centralized digital solutions for risk and compliance, you’re ideally placed to monitor and manage balance sheet risks in real time, meet changing regulatory requirements, gain full confidence in your data and fight fraud.
How do you assess the impact of digital solutions?
How do you quantify the impact of digital solutions?
FOCUS ON QUALITY
The impact of digitization depends on what the solution is and where you're using it. As an alternative to ACH transfers, for example, an open banking solution could save money on payments, by not only avoiding interchange fees but also confirming payees’ account details – reducing costly payment errors. But going digital is about more than cost cutting; it’s about delivering a service faster and improving the customer experience. And making that kind of qualitative impact takes commitment as well as outlay.
FOCUS ON VALUE
But going digital is about more than cost cutting; it’s about delivering a service faster and improving the customer experience. And making that kind of qualitative impact takes commitment as well as outlay.
The impact of digitization depends on what the solution is and where you're using it. For example, a payment factory for all your domestic and cross-border payment types could considerably reduce your transactional costs and the operational expense of multiple bank connections.
What’s the secret of a successful digital transformation?
What's the secret of a successful digital transformation?
CONCLUSION
THE RIGHT TECH PARTNER
Whatever shape your digital transformation takes, it’s important to choose your technology partners carefully. Above all, make sure they understand your problems and build solutions specifically for insurers. You also need partners who will help you achieve your boldest ambitions and advance your operations. Today, doing nothing is riskier than daring to innovate, transform and seize new opportunities. So, be fearless.
Digitalization takes specialist expertise – especially when you’re modernizing core insurance systems. It’s, therefore, important to choose technology partners that understand your problems and build best-of-breed solutions specifically for insurers. You also need partners who will help you achieve your boldest ambitions and advance your operations. Today, doing nothing is riskier than daring to innovate, transform and seize new opportunities. So, be fearless.
conclusion
Treasury, Risk and Payment suite
Increased volatility in the markets is driving more and more insurance companies to improve their IT infrastructure for hedging. Powerful digital systems help firms’ treasuries better manage their exposure to risk, get a clearer understanding of their current hedging levels and execute their hedging policies more efficiently and effectively. FIS is well placed to help insurance clients take their hedging infrastructure to the next level. For years, banks have relied on our innovative technology to deliver foreign exchange hedging services to their customers. Now, we’ve incorporated the same advanced capabilities into Treasury, Risk and Payment Suite – so treasurers can execute hedging strategies directly within the platform and reduce their operational costs. That’s a great example of how we help treasurers add value by bringing more value to the table ourselves.
FIS is well placed to help insurance clients take their hedging infrastructure to the next level. For years, banks have relied on our innovative technology to deliver foreign exchange hedging services to their customers. Now, we’ve incorporated the same advanced capabilities into Treasury, Risk and Payment Suite – so treasurers can execute hedging strategies directly within the platform and reduce their operational costs. That’s a great example of how we help treasurers add value by bringing more value to the table ourselves.
Increased volatility in the markets is driving more and more insurance companies to improve their IT infrastructure for hedging. Powerful digital systems help firms’ treasuries better manage their exposure to risk, get a clearer understanding of their current hedging levels and execute their hedging policies more efficiently and effectively.
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