The Next Big Thing in Commercial Insurance Distribution Strategies

Digital Transformation - November 27 2019

Commercial insurance distribution channels are being disrupted due to rapidly changing customer demands, emerging tech, and digital business models and ecosystems. The current state of manual underwriting processes, delayed responses, policy errors and omissions and the lack of bespoke services is no longer acceptable. As more competition, new incumbents and juggernauts like Amazon teach buyers to expect fast responses and instant gratification, more and more consumerization is seeping into commercial insurance causing agents and brokers to expect more from commercial lines insurers.

“The enterprise IT gold rush. Businesses across industries are in the middle of “a massive development cycle” as the use of advanced digital capabilities such as AI, blockchain and other tools sweeps across the economy, said John David Lovelock, a research vice president at research firm Gartner Inc. “These tools are getting everyone really pumped right now,” Mr. Lovelock said, adding, “There is a sort of new gold rush in enterprise IT.”

AI spending increasing. And enterprise customers are buying. Overall AI spending is expected to hit $35.8 billion this year, up 44% over last year, according to numbers released earlier this year from International Data Corp. And the AI market shows no sign of slowing down, with IDC projecting AI spending to more than double to $79.2 billion by 2022.

7 Strategies to Revamp Insurance Distribution Strategies

So, how can commercial insurance carriers reap the benefits of Artificial Intelligence (AI) to revitalize their distribution strategies in an increasingly customer-driven world? Upending core distribution strategies and disrupting long-standing business models, is no small feat. Let’s take a closer look at seven ways commercial insurance carriers can successfully improve agent/customer satisfaction.

1. Automate & Streamline Processes

Applying AI to digitally transform high volume, high human touch underwriting processes by giving skilled knowledge workers the ability to automate and standardize repetitive, error-prone tasks frees them up to spend more time nurturing distribution relationships and offering bespoke services. Data is a big problem in commercial lines, with no standardization of submission forms, data formats and data fields along with the quantity of data, using AI enables commercial lines insurers to extract data from unstructured insurance documents faster than a human – with greater accuracy.  This data can then be aggregated and propagated into automated AI-powered workflows and core insurance systems eliminating the time-consuming task of re-keying data into multiple systems.

With access to key behavioral data like never before, risk selection and pricing is faster and easier without compromising underwriting quality. AI-powered workflows like policy check, submission triage, and submission prioritization help to automate and standardize processes, shorten response times, and provide contract certainty to distributors.

2. Accelerate Response Times

What if carriers could respond to every application or submission received in one day? Today, brokers and agents submit applications to request quotes from insurers and more often then not they don’t even receive a response from the insurer leaving them wondering if they will receive a quote or not. In today’s world of instant chatbots, and communication tools at our fingertips, distributors expect a response. Imagine if by using AI, insurers could automate and streamline the application intake process to be able to quickly and easily identify the best applications to write and which ones to decline within seconds and sending an instant notification to the broker.

3. Augment Skilled Knowledge Workers with Digital Workers

Commercial lines insurers who integrate AI-powered workflows to automate traditional workflows in the insurance value chain will successfully achieve:

  • Real-time Data Extraction
  • Straight-Through Processing
  • Accelerate Quote to Bind
  • Eliminate E&O Risk
  • Increase Accuracy on Client Deliverables
  • Improve Communications

4. Shore Up Distribution Relationships

One sure-fire way to strengthen agent/broker relationships is to shorten response times from months and weeks to days.  Allow your agents and brokers to respond to their policyholder’s inquiries quickly and efficiently to optimize their customers’ experience.  As agents/brokers look for ways to differentiate amongst their competitors, delivering an exceptional customer experience is key. 86% of buyers will pay more for a better customer experience according to a survey commissioned by RightNow.

“Customers want information and digital insurance services supplied to them quickly and in a personalized way.”

– Ron Glozman, CEO, Chisel AI

5. Re-imagine Traditional Workflows

In an industry like insurance that has been using the same age-old processes for hundreds of years, the time is now to re-imagine workflows, to embrace emerging technologies and to introduce automation to workflows steeped in high-touch manual processes to speed up risk analysis, increase underwriting capacity and to remain competitive. AI-powered workflows automate and standardize data entry, policy checking, and application intake to accelerate quote-to-bind and achieve straight-through processing. Boosting an insurer’s operational efficiencies, optimizing costs, increasing revenue potential and delivering a better agent/broker experience.

6. Eliminate Friction

Distributors are looking for greater ease of doing business and have demonstrated a willingness to favor the ones that can meet their expectations. Commercial lines carriers that are the first to adopt AI to automate their application intake process by auto-declining, auto-routing, and auto-prioritizing submissions will be preferred by their existing agents/brokers and will be in pole position to pursue alternative distribution channels.

Insurers who can provide contract certainty will become the gold standard for their distribution channel. With AI-powered workflows that automatically check a policy against an existing policy, quote, application, submission, or binder in seconds, commercial lines insurers can automatically cross-reference and check all documents at once to validate accuracy before distributing new policies to agents and brokers. Fostering trust and reliability among distributors through the delivery of high quality, accurate, pre-checked insurance documents.

7. Personalize 1-on-1 Engagements

Use AI to reveal business insights to deliver personalized offerings by freeing trapped information from unstructured insurance data sources. Leverage data insights to identify potential coverages and endorsements based on customer similarities to offer bespoke customer services. Increase the dollar value of a policy by providing sound coverage advice based on customer insights and preferences. Deliver greater value, increase the likelihood of future business, provide customer-specific advice and strengthen distributor relationships.

Walker study predicted that by 2020 customer experience will overtake price and product as the key competitive differentiator. Insurance companies that combine high-quality products, high-quality service and high-quality customer experiences will outpace their competition. It’s the experience that drives increased acquisition, higher lifetime value, and a better bottom line.

Commercial lines insurers seeking to reduce the cost of service, refine pricing, digitally transform underwriting, and separate themselves from the pack should be integrating AI into their distribution strategy.

Don’t fall short on meeting your distribution channel’s expectations. Consider implementing AI today.

Buyers Guide Blog Banner without Borders

Browse different topics

Recent Posts