New capabilities and innovations in machine learning and artificial intelligence solutions like AI insurance rating engine are transforming both insurance products and customer experience. To get the most out of the sustained growth and innovation of tech, many organizations have begun to fundamentally change their business management practices to help them adapt better. In other words, they’ve started to become more agile.
What does being agile mean?
Building an agile business essentially refers to the process of looking into how all decisions and choices are made within the organization and in more traditional industries like insurance, making significant changes. Most insurers don’t mind risk. They’re generally comfortable with it because it’s the bedrock for many companies’ business models. Alternatively, agile innovation and working tend to deal more with uncertainty.
Simply put, innovation isn’t easy to prove if it hasn’t happened yet. However, that doesn’t necessarily mean that you can’t base it on a set of robust hypotheses, since there’s a lot of uncertainty involved, you mustn’t overdo analysis. And this is where being agile comes into play. Some would say it’s the opposite of a waterfall, wherein the plan is made, and decisions are taken, then go down the organization’s hierarchy and take all the various steps within the defined process.
Essentially, the objective is learning, pivoting, and deciding whether or not to put in a more significant assessment. The reason why it’s become such an important quality in the insurance space is that it enables providers to cope with and survive disruptive events. One good example is the COVID-19 pandemic, an event that severely disrupts businesses in the industry. Those who couldn’t adapt to it had crashed and burned—conversely, those who could be able to survive the pandemic.
How carriers are able to be more agile
For most traditional carriers, making changes in their workflows and processes doesn’t happen overnight. Whenever new technological solutions are involved, questions of their efficacy and impact on the company’s bottom line immediately come up if experiments fail. This is why agile work generally takes two complementary but distinct approaches. For starters, there’s the approach called piecemeal, where the business’ hygiene factors and its ROI-generating elements are addressed first.
The other approach is to adopt the philosophy of going beyond perfection. Companies need to quickly check for failures and opportunities to ensure that certain innovations have potential. This is partly because the competition could be moving fast, mainly reducing wasted resources. Innovation doesn’t necessarily need to be refined for its potential to show.
Insurance companies may implement agility fast, but they could struggle with the development of in-house technical skills that can foster innovation. Service providers and vendors are specialists and are used to innovating and assimilating new technologies in their respective fields. By partnering with them, carriers will have the access they need to valuable insight and skills. As a result, they’ll put themselves in a more favorable position in the sector and give them the ability to adapt to market conditions when need be.