The insurance industry is one sector that is slow to adopt technological innovations and change. Moreover, the industry is paperwork-intensive. Often, insurance companies maintain the traditional way of doing business, using several printed forms and documents, some of them prepared manually.
Only recently has big insurance companies started using tech tools for their business. Thus, they began to realize that they could work faster and process documents quicker by using innovative tech tools, which increase their productivity and efficiency without eliminating the essence of the business. However, the reality is that using innovation is not complex and only requires shifting their mindsets and learning how to use new business tools, such as agile methodology, which have a big and positive effect on business activities.
Defining agile methodology
Agile is a product development approach executed by collaborative teams. They focus on speed, user feedback, and repetition. As a result, agile allows companies to spend less time and money on making better products that meet the changing needs of stakeholders.
Agile methodology can help insurance companies create better solutions more quickly. Agile teams are smaller and have different skill sets. The team adapts a flexible vision corresponding to the changes gathered from target market feedback. Using all the information available, the methodology helps develop innovative solutions and makes organizations more efficient.
According to Earnix, agile methodology follows some core principles:
- Individuals and interactions are above tools and processes.
- Working software is better than comprehensive documentation.
- Choose customer collaboration instead of contract negotiation.
- Responding to change works better than following a fixed plan.
How agile methodology applies to insurance
The pandemic is one of the reasons why insurance moves faster today, meaning insurance agencies should keep up with the pace. Agile teams can identify problems and develop simple solutions within a short time. Agile improves employee engagement and customer satisfaction. Agile teams develop better products and help the business become more efficient as they see more potential in using innovation.
The agile process is simple. If a customer has a problem, the insurance agency thinks of a solution. There is no need to spend big money on the solution. Instead, the team can build a simple solution and see if it works, measure customer feedback, check what they have learned, and tweak the solution.
Coming up with new insurance products
It is a challenge for insurance carriers to introduce new products. The process could take several months because most carriers follow a hierarchical procedure involving different departments.
But with an agile team comprising multiple actuaries, data scientists, software developers, a customer-journey designer, and a marketing expert, they can easily work on developing new products and selling them through digital channels. The agile team maintains the product continuously, gathers customer feedback, and refines customer journeys. They then target sales improvement until other strategic needs arise.
Using agile methods helps insurers adapt to the rapid changes in the industry. To make agile work, insurance companies must reorganize their traditional governance and create agile teams that can shorten the time to market. Moreover, they should use the lessons learned from the pandemic experience to quickly develop insurance products that meet the needs of individual customers rather than sticking to an overall approach.