Tag: insurance

The Future at Lloyd’s Initiative – What It Means for the London Insurance Market | Blog

Lloyd’s of London, as part of its Future at Lloyd’s initiative, released Blueprint Two in November 2020 as a follow-up to its initial strategy of advancing the London market’s efficiency and enhancing stakeholder experience. The initiative clearly outlines the changes to be implemented over the next two years to realize the vision set out in Blueprint One, which was released in September 2019 and which listed the different components that would make up Lloyd’s ecosystem: primarily, a complex risk platform with data-first capabilities; Lloyd’s risk exchange to process relatively non-complex, high-volume, low-value risks; a claims solution to automate simple claims; and a new syndicate-in-a-box concept to encourage innovative and accretive business and talent at Lloyd’s.

Understanding Blueprint Two

Apart from its intent as outlined above, Blueprint Two addresses Lloyd’s market participants’ concerns about the inefficiencies caused by disjointed processes and technologies used in risk placement and claims handling by transforming the processes into a seamless end-to-end experience.

Blueprint Two focuses on two core placement types – the open market and the delegated authority business – which together account for more than 90% of the insurance contracts placed at Lloyd’s. The blueprint keeps the customer at its heart, simplifies the complexity of doing business, accelerates the data value realization process, and fosters trust through open communication and transparency.

Lloyd’s plans to achieve consolidated savings of GBP800 million by adopting digital technologies that enable automation, virtual collaboration, digital contract management, automated data ingestion, electronic First Notice of Loss (eFNOL), intelligent workflow management, and third-party integration. Lloyd’s will spend an estimated GBP200 million over the next two years to support future initiatives and realize the goals laid out in Blueprint Two. As the pandemic has expedited the need to move to a new digital environment, Lloyd’s aims to move its marketplace operations from a predominantly document-based model to a document-plus-data model, ultimately reaching a data-first operating model.

What the transformation offers and what it means for the market

For technology and service providers in the London market, the transformation program presents a host of opportunities to advance their market standing by providing:

  • A virtual collaboration environment: The push to move the interactions between brokers and underwriters toward a more digital environment has created the need for a digital workplace and collaboration solutions
  • Integration with third-party systems: As the marketplace evolves further, it will offer a choice of different risk-placing platforms (such as PPL) and the need for Application Programming Interfaces (APIs) to integrate them to enable seamless data exchange
  • Ancillary or value-added services: To enable this transition, there will be a need for greater risk and regulatory compliance, tax calculation, and fraud and claims investigation services
  • Digital processing capabilities: The future digital marketplace will need solutions to reconcile transactions/contracts and maintain a single ledger as a source of truth for all the parties involved
  • Intelligent workflow management: To automate claims data ingestion, validation, and dynamic routing, an eFNOL portal will be connected to the claims solution. Doing so will drive the adoption of workflow automation and rules-based decisioning for claim-policy matching, claims adjudication, and faster automated payments
  • Platform/solution development: The need to facilitate collaboration between managing agents and coverholders will drive the development of custom solutions, which will help in coverholder onboarding, data flow management, risk placement, and contract management between the parties involved

What will it take for Lloyd’s to transform?

As Lloyd’s looks at pioneering specialty risks coverage and introducing new syndicates as part of its transformation program, it needs to be mindful about how to proceed with talent acquisition and data strategy.

Coverage for newer specialty risks demands a revamped data strategy to combine data from non-traditional sources, mitigate data privacy risks, improve data accessibility for relevant stakeholders, and run analytics to enable innovative risk pricing. At the same time, dedicated effort is needed to acquire talent with relevant technology skills (such as APIs, microservices, and advanced analytics) and expertise in handling complex specialty risks, such as the protection of commercial spacecrafts, satellites or intangible risks such as the voice of a singer.

While Lloyd’s of London aims to expand its market operations globally, its market participants will also need to ramp up their enterprise software capabilities to avoid being too Lloyd’s-centric, which means enabling technology transformation of the wider London insurance market and not only for its market participants.

For technology service providers operating in the London market, this initiative represents an opportunity to develop modern software platforms built with flexibility in mind. Service providers can achieve these benefits by leveraging an ecosystem of specialist technology vendors and insurtechs, and focusing on enhanced virtual collaboration, data and security, intuitive customer experience design, cloud-native architecture, and artificial intelligence.

If you’d like to learn more about the recent developments at Lloyd’s of London and their impact, please reach out to us directly at [email protected] or [email protected].

Everest Group Predicts Significant Slowdown in Revenue for Third-Party Administrators as Needs of Insurance Industry Shift | Press Release

Insurers’ extreme focus on employee and customer experience is forcing TPAs to adapt their offerings beyond commoditized services by leveraging digital technology.

Some third-party administrators (TPAs) are building the requisite capabilities in talent, technologies and data to address the changing needs of the insurance industry, but most TPAs lag behind. Everest Group reports that the top 10 US TPAs suffered a significant drop in year-on-year revenue growth, falling from 20% for 2017-2018 to 5-10% for 2018-2019. Everest Group predicts the slowdown will continue in the year ahead under the impact of the COVID-19 crisis as TPAs look to battle against the falling demand and the changing requirements of insurers.

“Insurers’ extreme focus on employee and customer experience is forcing TPAs to adapt their offerings beyond commoditized services,” said Skand Bhargava, practice director at Everest Group. “Most of the digital-led use cases that TPAs have implemented thus far are low on the sophistication scale when compared to the use cases implemented by insurance IT or Business Process Outsourcing providers. However, some leading TPAs have showed signs of change, making intensified digital investments in more new-age partners and technologies, such as the use of IoT sensors, artificial intelligence, predictive image analytics, telematics and predictive modeling. As a result, these more innovative TPAs are reaping differentiation in the market and positioning themselves for success amidst recessionary pressures because of the greater value they are providing for their clients. Going forward, those TPAs who deliberately commit to well-executed digital transformation will not only deliver a more progressive value proposition to clients but also secure the relevance of the overall industry, especially considering the current environment.”

Third-party administrators are commonly used by health insurance providers as well as enterprises or healthcare organizations who fund their own health plans for employees. TPAs assist these organizations with claims administration as well as premium billing, customer enrollment, and other day-to-day operations of insurance programs.

Currently, the Top 10 TPAs in the U.S command only 3-5% of a $270 billion market, with some of the largest TPAs functioning on single-digit operating margins and very few keeping pace with digital transformation. By leveraging digital technology, TPAs can improve margins, drive differentiation, address operational challenges, enhance talent throughput and ensure client retention. In the longer term, digital adoption can help TPAs adjust to changing risks and move up the value chain to manage critical tasks.

Everest Group shares these findings in its recently published report, Third Party Administrator (TPA) State of the Market Report 2020: Industry Facing an Urgent Mandate to Transform. This report examines the global TPA market, particularly the property and casualty (P&C) and workers’ compensation insurance segments, including changes in client demand patterns and delivery requirements from TPAs, and the role and adoption of digital levers.

Additional Findings

  • For property and casualty (P&C) and workers’ compensation insurance, TPAs are primarily restricted in the value chain to end-to-end claims management.
  • For employee benefits—both life and pension (L&P) and health insurance—TPAs play a more end-to-end administration role.
  • While there are multiple growth drivers for the TPA industry, such as expansion in the scope of services and carrier outsourcing, there are a number of impending challenges as well that restrict the growth opportunities.
  • Intelligent automation, mobility, predictive analytics, drones, and cloud-based modern claims platforms are the five key digital and technological enablers for the transformation of the TPA industry.

***Download a complimentary abstract of this report.***

About Everest Group
Everest Group is a consulting and research firm focused on strategic IT, business services, engineering services, and sourcing. Our clients include leading global enterprises, service providers, and investors. Through our research-informed insights and deep experience, we guide clients in their journeys to achieve heightened operational and financial performance, accelerated value delivery, and high-impact business outcomes. Details and in-depth content are available at http://www.everestgrp.com.

APIs a Key Component of Insurance Digital Transformation | In the News

Fun fact: Many long-established insurance companies still rely on legacy mainframes computers running applications in an outdated programming language from the 1960s. That’s not ideal, because today’s tech-savvy, smartphone-using customers are more mobile and expect real-time information whenever and wherever they are, without the assistance of an agent or a call center representative. Not good, because the modern agent requires new tools and applications to maintain productivity in a mobile environment, including instant policy quotes. And especially not good, because the “insurtechs” – new, innovative, and rapidly growing companies with social savvy marketing and modern technologies – are just waiting in the wings, ready to grab your market share.

You have to adapt and evolve in record time to create a seamless customer experience while improving employee productivity to remain competitive and increase customer retention. By implementing APIs and microservices, you can extend those insurance backend systems to mobile, web, and cloud rapidly, and cost-efficiently, all with low risk. By using the “art” of the API, you succeed where past transformation options failed.
According to an article in Forbes by Peter Bendor-Samuel, “The record of studies on digital transformation indicate a high failure rate, with a notable 2013 McKinsey study finding that 70% fail. That is a lot of wasted time, money and unmet expectations.”

Read more in Digital Insurance

Digital Insurer of the Future — June 27 | Webinar

Wednesday, June 27, 2018

Register to attend

Research Practice Director Manu Aggarwal and research analyst Saurabh Verma will be guest speakers during Capgemini’s June 27 webinar: Digital Insurer of the Future.

The webinar will start with a 20-minute introduction by Everest Group on industry trends, the need for digitization of insurance operations, and the role third parties can play in fast-tracking the Digital journey for insurance companies

About the webinar

This webinar will help orgs understand “how to” digitize their front and back-office operations to deliver increased efficiency, faster turnaround time, and enhanced member experience.

Although traditional third-party administrator (TPA) services have been around for quite some time, insurance companies are under increasing pressure to deliver breakthrough innovation in customer experience and a significant reduction in administrative spend through leveraging Digital across their policy administration.

Capgemini has been listening to the market and together with leading analyst firm Everest Group brings you an exciting opportunity to learn how to digitize your insurance operations across your entire core policy administration.


Manu Aggarwal, Research Practice Director, Everest Group
Saurabh Verma, Research Senior Analyst, Everest Group

Register to attend

53% of Insurers Are Opting to Develop AI Capabilities In-house— Everest Group | Press Release

A high skills gap in AI expertise is impeding adoption and acceleration of AI initiatives and compelling insurers to consider creative tech partnerships

As leading insurers transition toward becoming technology-focused firms, they are encountering a high skills gap in the area of Artificial Intelligence (AI), a significant barrier to their efforts to scale pilot projects and realize the expected value from AI initiatives. Everest Group reports that the majority (53 percent) of insurers are opting to build in-house AI capabilities through hiring, internal training, hackathons, acquisitions and InsurTech partnerships.

Conversely, 47 percent of insurers are turning to IT service providers to address the skills gap and accelerate time to market. Many of these service providers bring AI implementation expertise not only from their work with other insurers but also from their work in other industries that are further ahead on the AI adoption curve. Service providers such as Capgemini, Cognizant, HCL, IBM, Infosys, LTI, TCS and Wipro are building insurance domain-wrappers on top of their existing AI platforms to demonstrate early Proof of Value (POV) and accelerate the time to market for their clients.

“Global insurance executives correctly believe that adopting AI can catalyze the transformation of their business models and help their companies stay competitive in the market,” said Ronak Doshi, practice director with the IT Services research practice at Everest Group. “However, among all technologies being adopted by insurers, the skills gap is the highest for IoT and cognitive and AI-based technologies. So, insurers are exploring creative ways to address the skills gap, not the least of which is partnerships with InsurTechs and service providers who can bring AI expertise to the table.”

Everest Group studied 80 distinct AI-focused investments by global 100 insurers and recently released its findings in the report, “Artificial Intelligence (AI) in Insurance Moving From Pilots to Programs: Insurance IT Services Annual Report 2018.” In this report, Everest Group explores the adoption penetration of AI across the insurance value chain and provides snapshots of nearly 20 successful applications of AI by leading insurers.

***Download a Complimentary Abstract of the Report***

The key business objectives and leading use cases for AI in the insurance industry fall into these three categories:

  • Customer Experience (58 percent). Improving front-end customer experience remains the top priority and accounts for 58 percent of all the analyzed use cases. Insurers are trying to provide personalized and instant services to customers using chatbots and mobile applications. Leading use cases include validating insurance cases against business rules and using speech analytics solutions for sales and operational efficiency.
  • Process Improvement (43 percent): AI is helping insurers optimize processes, both internally and externally. Claims management remains a priority for the insurer, helping customers to fast-track their claims process and reduce the time taken for payments. Insurers are also using AI to improve efficiency in documentation and call center operations. Leading use cases include mobile applications and web portals to answer customer queries and give policyholders one-stop access to their documents.
  • Product Innovation (19 percent): Leveraging AI for product innovation is in the nascent stage of development. Insurers are using IoT devices such as those for telematics, connected homes and connected self, to develop more usage-based insurance products for customers. Leading use cases include leveraging data from connected vehicles and using AI-powered wearable devices and mobile applications to help customers with personalized advice.

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