Welcome!

PHP Authors: Liz McMillan, Carmen Gonzalez, Hovhannes Avoyan, Lori MacVittie, Trevor Parsons

Related Topics: @CloudExpo, Machine Learning , Artificial Intelligence, @ThingsExpo

@CloudExpo: Blog Feed Post

Insurance Industry's #DigitalTransformation | @CloudExpo @AppDynamics #ML

The web, mobility, and social media have introduced new sources of truth for the modern consumer

Digital Transformation in the Insurance Industry
By Omed Habib

The insurance industry is well aware that digital transformation is coming, even if some CIOs can’t really say what their individual companies will look like at the end of it all. In a survey of thousands of C-level execs around the world, insurance came in among the top five industries that are most likely to see “moderate to massive” digital disruption within the next 12 months. Only 20 percent of business leaders felt that they had the talent they needed to transform the enterprise, though. Here’s a closer look at what’s coming next in the exciting new era of software-defined insurance companies.

The Growth of the Insurance Model
The basic business model of the insurance industry hasn’t changed much since Edward Lloyd opened his coffee shop for seafaring folk in London in 1688. In the decades after Shakespeare passed away, Lloyd’s of London became a hotbed of intelligence on which ships had been seen where, how they fared on the open sea, and how likely they were to come into port with a healthy profit. The management at Lloyd’s created marine underwriting, insuring the riskiest of enterprises at the time.

In the three centuries or so that followed, insurance spread out to cover risk in many aspects of life, but the business model stayed constant. Actuarial experts with specialized knowledge on consumer and business risk assigned fees, and intermediaries made recommendations to customers. Now that era has come to a permanent close.

The web, mobility, and social media have introduced new sources of truth for the modern consumer. Comparison of side-by-side alternatives are instantaneous and comprehensive. Mobile device apps have ratcheted up expectations for insurance services that are autonomous, fast, and simple. In many cases, recommendations from networks of friends and family have replaced the insurance salesperson entirely. Just as web-enabled airline websites devastated the travel agency industry, software-defined insurance companies are sinking the ancient insurance business model.

How Online Insurance Simplified Complexity
One of the earliest software-defined insurance carriers, Esurance, opened its web-based car insurance services in 1999. It solved the problem of the time-consuming quote process that tended to end up with non-comparable policies.

The biggest innovation of Esurance was to break up the policy into components that could be added or removed by the consumer, moving the locus of information control out of the hands of the insurance agent. Many other companies followed, competing on capabilities of their websites. By the time Allstate bought the company in 2011, Esurance was valued at $1 billion.

The next generation of insurance tech transferred greater information control into the hands of the consumer. At the same time, it gave insurance carriers better information to use in assessing risk and establishing premiums. This took the form of:

  • Mobile apps that allowed simple account management tasks, tracked repair updates, and offered answers on insurance-related questions. These were always-on and available whenever the consumer had time, instead of during business hours.

  • Greater processing power and big data analysis allowed carriers to crunch more data in less time.

  • Web-based tracking provided customer data that was funneled to email for lead generation.

More and more, the essential core-value proposition of many insurance companies subtly changed from writing the most accurate policies to offering the most customer-centric brand. Geico became the nation’s number one insurance advertiser, betting $1.18 billion in ad spending on its brand. For Geico and Progressive, this kind of branding has paid off, but others in the same vertical have not seen the same kind of results. The larger carriers have consolidated their market dominance through better tech.

How Insurance Companies Are Becoming More Like Software Companies
In many ways, almost all companies are now considered software companies to some degree. Thanks to software, here are a few of the ways that innovative insurance companies are more agile than ever before:

  • Policy overview: Most companies have a secure sign-on area of the website or in the app to review policy details. Because of the fluid identity of online viewers, it can prove difficult for companies to definitely identify all the policies of a single individual or family.

  • Mid-term adjustments: Policies normally don’t change over the coverage period, but sometimes a change is big enough to affect the price. For example, the change of a ZIP Code, or even different streets in the same neighborhood, can change the price of coverage.

  • Loss notification: Many apps allow customers to begin a claim up to a certain point. This is one of the biggest areas for developers to focus on in terms of responsive AI that can ask the right questions.

  • Checking claim status: Most insurance companies have a place to check the status of a claim, but it is usually a field that must be updated manually, so it is not always current. Many times, the information isn’t sufficient, prompting a call for clarification. This area deserves more attention for automation and back end integration with other stakeholders in the claims process.

  • Directory assistance: Some insurance apps add value by providing information tangentially connected to insurance, such as a garage finder for car repairs.

Still, a survey of U.S. policy holders found that only 39 percent said that their insurance providers communicated with them along their preferred channels, such as SMS, email, or mobile apps.

The Next Wave of Insurance Tech
In many ways, mobile devices were merely the first step on the way to the rapid adoption of wearables. It’s no wonder that many insurance companies are already looking for original ways to provide value across the tiny screens of wearables.

According to 2014 survey data by Strategy Meets Action, nearly a quarter of U.S. insurance carriers (22 percent) reported they are already developing a strategy for wearables. Claims assessments, risk management, and data collection for telematics are three of the primary use cases for wearables and other emerging technologies like IoT.

Along those lines, an insurance company recently conducted a test of a Google Glass-type technology for claims adjusters. Video and images of the accident site were transferred directly from the field adjuster to the catastrophe division for faster claims processing. In the future, augmented reality can provide two-way data streams for adjusters in the field and their co-workers at the back end for more accurate decision-making in real time.

New Languages for Insurance
Many people still think of programming for insurance in terms of mainframes, COBOL, and Pascal. While there are legacy IT pieces still out there, insurance today is about enterprise development, mobile apps, and the cloud. In fact, many mainframes are making the complex transition into de facto cloud data centers running the latest Java deployments.

The impact of the modern stack is clear in the fact that Java, Python, and C++ still reign as the top choices for enterprise development in just about every industry. Java has many enemies in the coding world, but it still leads for large-scale deployments. Surprisingly, .NET is another leader, identified as the number one preferred enterprise development platform in a survey by Forrester.

The expanding volume and velocity of data is also creating a need for insurance developers proficient in R, Julia, Hadoop, and Scala.

The Problem with Millennials
At the same time insurance companies are planning ways to make the best use of emerging tech, they are also trying to adapt to the life preferences of the largest purchasing block in the population today.

On the plus side, millennials are more than two times as likely to buy insurance online, according to the latest Gallup polls. Twenty-seven percent of millennials are comfortable with online purchasing, compared to 11 percent for all other generations. Overall, 74 percent of the total population purchased a policy after talking to an agent. Because of the growth of AI chatbots and the availability of streaming video, millennials are likely to possibly do more without agent interaction in the years ahead.

On the negative side, millennials represent the largest number of customers who are actively disengaged (27 percent) or indifferent to (42 percent) their insurance carriers. That’s a recipe for greater churn and engagement wars among insurance carriers. The primary way that carriers are looking to improve that engagement is through better customer experiences.

Gallup suggested that messages related to performance and security appeal to the millennial’s concern for protecting private information. Simplified flow for completing coverage changes was another way that millennials gauge performance.

How Insurance Companies Can Improve The Customer Experience
As more insurance companies adapt to the latest hardware and software, they are discovering a corresponding need for optimization and performance monitoring to deliver on the promise of the technology. Customers have come to expect peak performance, reliable stability, and uptime. This can be especially difficult because many insurance carriers still operate using a mix of legacy and custom development applications.

AppDynamics’ application performance management for the insurance industry is tackling challenges like these head-on, before they put a drag on the customer experience. These systems can’t be productive without careful attention to performance, usability, and availability. To end users, the digital experience of their insurance provider has an effect on their perception of the overall brand.

Learn More
Find out more about our product or start your free trial today.

The post Digital Transformation in the Insurance Industry appeared first on Application Performance Monitoring Blog | AppDynamics.

More Stories By AppDynamics Blog

In high-production environments where release cycles are measured in hours or minutes — not days or weeks — there's little room for mistakes and no room for confusion. Everyone has to understand what's happening, in real time, and have the means to do whatever is necessary to keep applications up and running optimally.

DevOps is a high-stakes world, but done well, it delivers the agility and performance to significantly impact business competitiveness.

@ThingsExpo Stories
Enterprises have taken advantage of IoT to achieve important revenue and cost advantages. What is less apparent is how incumbent enterprises operating at scale have, following success with IoT, built analytic, operations management and software development capabilities – ranging from autonomous vehicles to manageable robotics installations. They have embraced these capabilities as if they were Silicon Valley startups. As a result, many firms employ new business models that place enormous impor...
SYS-CON Events announced today that SourceForge has been named “Media Sponsor” of SYS-CON's 21st International Cloud Expo, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. SourceForge is the largest, most trusted destination for Open Source Software development, collaboration, discovery and download on the web serving over 32 million viewers, 150 million downloads and over 460,000 active development projects each and every month.
SYS-CON Events announced today that Dasher Technologies will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Dasher Technologies, Inc. ® is a premier IT solution provider that delivers expert technical resources along with trusted account executives to architect and deliver complete IT solutions and services to help our clients execute their goals, plans and objectives. Since 1999, we'v...
As popularity of the smart home is growing and continues to go mainstream, technological factors play a greater role. The IoT protocol houses the interoperability battery consumption, security, and configuration of a smart home device, and it can be difficult for companies to choose the right kind for their product. For both DIY and professionally installed smart homes, developers need to consider each of these elements for their product to be successful in the market and current smart homes.
SYS-CON Events announced today that MIRAI Inc. will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. MIRAI Inc. are IT consultants from the public sector whose mission is to solve social issues by technology and innovation and to create a meaningful future for people.
SYS-CON Events announced today that Massive Networks, that helps your business operate seamlessly with fast, reliable, and secure internet and network solutions, has been named "Exhibitor" of SYS-CON's 21st International Cloud Expo ®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. As a premier telecommunications provider, Massive Networks is headquartered out of Louisville, Colorado. With years of experience under their belt, their team of...
SYS-CON Events announced today that TidalScale, a leading provider of systems and services, will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. TidalScale has been involved in shaping the computing landscape. They've designed, developed and deployed some of the most important and successful systems and services in the history of the computing industry - internet, Ethernet, operating s...
Widespread fragmentation is stalling the growth of the IIoT and making it difficult for partners to work together. The number of software platforms, apps, hardware and connectivity standards is creating paralysis among businesses that are afraid of being locked into a solution. EdgeX Foundry is unifying the community around a common IoT edge framework and an ecosystem of interoperable components.
Coca-Cola’s Google powered digital signage system lays the groundwork for a more valuable connection between Coke and its customers. Digital signs pair software with high-resolution displays so that a message can be changed instantly based on what the operator wants to communicate or sell. In their Day 3 Keynote at 21st Cloud Expo, Greg Chambers, Global Group Director, Digital Innovation, Coca-Cola, and Vidya Nagarajan, a Senior Product Manager at Google, will discuss how from store operations...
In a recent survey, Sumo Logic surveyed 1,500 customers who employ cloud services such as Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP). According to the survey, a quarter of the respondents have already deployed Docker containers and nearly as many (23 percent) are employing the AWS Lambda serverless computing framework. It’s clear: serverless is here to stay. The adoption does come with some needed changes, within both application development and operations. Tha...
SYS-CON Events announced today that IBM has been named “Diamond Sponsor” of SYS-CON's 21st Cloud Expo, which will take place on October 31 through November 2nd 2017 at the Santa Clara Convention Center in Santa Clara, California.
In his Opening Keynote at 21st Cloud Expo, John Considine, General Manager of IBM Cloud Infrastructure, will lead you through the exciting evolution of the cloud. He'll look at this major disruption from the perspective of technology, business models, and what this means for enterprises of all sizes. John Considine is General Manager of Cloud Infrastructure Services at IBM. In that role he is responsible for leading IBM’s public cloud infrastructure including strategy, development, and offering ...
Infoblox delivers Actionable Network Intelligence to enterprise, government, and service provider customers around the world. They are the industry leader in DNS, DHCP, and IP address management, the category known as DDI. We empower thousands of organizations to control and secure their networks from the core-enabling them to increase efficiency and visibility, improve customer service, and meet compliance requirements.
Join IBM November 1 at 21st Cloud Expo at the Santa Clara Convention Center in Santa Clara, CA, and learn how IBM Watson can bring cognitive services and AI to intelligent, unmanned systems. Cognitive analysis impacts today’s systems with unparalleled ability that were previously available only to manned, back-end operations. Thanks to cloud processing, IBM Watson can bring cognitive services and AI to intelligent, unmanned systems. Imagine a robot vacuum that becomes your personal assistant tha...
With major technology companies and startups seriously embracing Cloud strategies, now is the perfect time to attend 21st Cloud Expo October 31 - November 2, 2017, at the Santa Clara Convention Center, CA, and June 12-14, 2018, at the Javits Center in New York City, NY, and learn what is going on, contribute to the discussions, and ensure that your enterprise is on the right path to Digital Transformation.
Recently, REAN Cloud built a digital concierge for a North Carolina hospital that had observed that most patient call button questions were repetitive. In addition, the paper-based process used to measure patient health metrics was laborious, not in real-time and sometimes error-prone. In their session at 21st Cloud Expo, Sean Finnerty, Executive Director, Practice Lead, Health Care & Life Science at REAN Cloud, and Dr. S.P.T. Krishnan, Principal Architect at REAN Cloud, will discuss how they b...
SYS-CON Events announced today that mruby Forum will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. mruby is the lightweight implementation of the Ruby language. We introduce mruby and the mruby IoT framework that enhances development productivity. For more information, visit http://forum.mruby.org/.
Digital transformation is changing the face of business. The IDC predicts that enterprises will commit to a massive new scale of digital transformation, to stake out leadership positions in the "digital transformation economy." Accordingly, attendees at the upcoming Cloud Expo | @ThingsExpo at the Santa Clara Convention Center in Santa Clara, CA, Oct 31-Nov 2, will find fresh new content in a new track called Enterprise Cloud & Digital Transformation.
SYS-CON Events announced today that NetApp has been named “Bronze Sponsor” of SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. NetApp is the data authority for hybrid cloud. NetApp provides a full range of hybrid cloud data services that simplify management of applications and data across cloud and on-premises environments to accelerate digital transformation. Together with their partners, NetApp emp...
SYS-CON Events announced today that Avere Systems, a leading provider of enterprise storage for the hybrid cloud, will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Avere delivers a more modern architectural approach to storage that doesn't require the overprovisioning of storage capacity to achieve performance, overspending on expensive storage media for inactive data or the overbui...