Carriers and MGAs seek two big benefits from their technology investments. First, they want to save time and resources by making their processes more efficient and effective. Second, they want to deliver the type of customer experience that mimics the seamless approach taken by InsurTech startups and other savvy competitors.
But technology can sometimes misfire. Systems may not talk with one another, leading to downstream errors. They may generate inaccurate coverage or premiums and communicate that information to insureds. And systems fueled by artificial intelligence (AI) may miscalculate pricing and risk based on unintended biases. When these problems occur, carriers and MGAs must scramble to find answers.
Let’s review three of the most common tech headaches we’ve seen, along with three fixes to make sure they don’t happen to you.
1. Integration issues
Let’s say you’re pricing homeowner’s policies. You’re likely using agency management software to do so. But will that software know what to do, for example, if you’re pricing a new build in a subdivision where the roads aren’t yet dedicated? If your software can’t locate an address, will it zoom out to zip code, city or county data using a third-party site? Will it calculate the protection class correctly? Any misstep along the way could lead to an inaccurate policy. Unfortunately, many carriers and MGAs may not even know they’re having an integration issue until it’s too late.
The fix: Software testing will run different scenarios, allowing you to learn where integration errors exist, get more information about the type of problems they’re causing, and allow you to remedy them before they become larger issues.
2. Customer experience issues
The joy a customer gets by getting a homeowner’s insurance policy with just a few clicks of her smartphone may turn to anger when she goes to submit a claim and finds out she doesn’t have the coverage she needs. Today’s technology solutions must help insureds understand what’s covered—and what isn’t. The tech wizards who design the newest systems sometimes lack insurance experience. They won’t know the steps to process an endorsement. They may not understand the myriad of regulatory requirements in our industry. Do they know, for example, that some state laws prohibit electronic notification of cancellation? Without these important details hardwired into your systems, you run the risk of poor customer service—the exact opposite of what you’re trying to accomplish.
The fix: When it comes to software, rely on companies with deep tech and insurance expertise. At West Point Insurance Services, we’ve had the privilege of working with tech startups that consult with us to get a thorough understanding of the insurance lifecycle. This proactive approach helps them create a better product for their users.
3. AI issues
AI is designed to mimic the decision-making processes of human beings. And, like human thought, it’s not without flaws. One potential area of concern emerging for insurers is unintended bias. Take, for example, an insurer that markets homeowners policies to two different areas. One is underdeveloped, the other one is higher priced. If they sell more policies to the higher-priced homes, AI could take that data, determine those homes carry less risk, and inadvertently assign the underdeveloped area to a higher risk category.
The fix: Testing allows insurers to run numerous scenarios and learn how AI-fueled features react to them. Insurers can then set up boundaries to ensure their AI pricing models remain consistent.
If you have questions about testing and automation solutions for legacy systems developed and deployed by my colleagues and me, or would like to schedule a demo of our testing services, call 727-489-9190, visit www.westpointuw.com or email email@example.com.