DevOps in Insurance: Here's What You Need to Know
by Scott Reece, on Sep 13, 2019 10:30:00 AM
DevOps adoption in the insurance industry is becoming increasingly important as Insurtech disruptors increase the threat to incumbent actors. Yet incumbents are currently struggling to integrate digital technologies into complex systems with years of legacy processes behind them at a time when (fast) innovation is simply a necessity.
With disruptors able to focus on speed and efficiency in critical areas such as customer experiences, incumbents must adapt or watch market share fade away.
Insurance companies need to adopt the approaches that make Insurtech disruption possible. Only this will allow them to make their own innovations and to adapt quickly to customer expectations in the market.
DevOps adoption is the foundation for bringing this new, modern approach into an organization. DevOps development processes allows the application lifecycle to iterate and improve quickly, giving incumbent insurers the ability to roll out new features to combat the customer acquisition strategies of Insurtech.
What Does the Future of an Insurance Claim Look Like?
To understand the potential impact of new technologies on the insurance industry, look no further than the future of insurance claims themselves. The disruption of the traditional insurance model is already happening today, and changes sparked by Insurtech players are being emulated by the second wave of DevOps adopters right now.
The key underlying concept of risk management in insurance will continue to be a focal point. What will change is the number and nature of the tools used to evaluate that risk on both the Development and Operations sides. As the complexity and ubiquity of interconnected IoT products and the data they generate grow in scale and importance, the technology adoption will increase at a commensurate rate.
AI Bots in Insurance
For example, in the near future, an insurance customer will be able to compare policies and purchase a property damage policy without ever needing to interact with a human. An AI bot can collect the minimum information needed and then process the request using known variables and risk factors and return a policy almost instantly.
That same customer will then be able to file a storm damage claim through a SaaS application including uploading pictures and description of damage. Using advanced analytics, existing data, and up-to date weather analysis, software will be able to compare the photos uploaded to others submitted based on storms of similar intensity that occurred and approve the claim without human judgement.
The customer will be informed almost immediately of their claim approval, policy details outlining what they are covered for, and a list of local contractors that specialize in that type of damage and are approved by the insurance company.
Insurance in the Cloud
In order to respond to this new and complex claims environment, cloud adoption among insurers is already increasingly common as a way to hold and process the data collected by IoT devices. Then, adoption of complicated machine learning techniques and advanced analytics technologies are required to carve out actionable business intelligence from all that data.
Keeping all this (and myriad other possibilities for technological use) straight will be difficult, if not impossible, without the kinds of DevOps processes in place that can ensure the application lifecycle continues to drive innovation while also being lithe enough to remain current with as little friction as possible.
Without that ability to respond to marketing challenges on both the customer and competition side via better technology, insurers will quickly find themselves outpaced and non-competitive in the market.
Below are just a few of the key challenges insurers can expect to face as they adopt new technologies at an ever-increasing pace.
Remain as Customer-centered as Possible
The insurance industry will transform to be increasingly customer-focused if providers want to capture market-share and retain current clients. A key part of this will be on making all engagements with a customer as easy as possible (often during a high-stress time).
This customer-centered approach will be necessary as more insurance is being purchased through marketplaces where users get an apples-to-apples comparison of many insurance options. In these cases, word-of-mouth and past experience will be a deciding factor in selecting a provider.
Insurance disrupters are also moving towards an ecosystem-base approach, offering sets of services that are interconnected and fit a broader set of needs for clients. The survival of such an ecosystem will only work if a current client is pleased enough with past experiences to increase their commitment to a company.
The insurance industry is still one of the most regulated industries, and government oversight will not be decreasing in the foreseeable future. In the last two years, several states in the U.S. have adopted the Insurance Data Security Model Law, bringing with it regulations to protect non-public information, data breach notifications, incident reports, and more. More states, provinces, and countries will continue to implement similar regulations that must be met.
Providing New Features to Customers Quickly
Customers will expect new platforms and features to be always available and consistently updated with new services and features. To achieve this, providers will need to be able to release software updates rapidly and without disrupting current services. Increased usability and consistent feature sets across devices will be demanded by users as it has become a SaaS standard.
Many car insurance providers allow the option of putting a dongle in your ODB port in your car. This device monitors your driving, and you become eligible for discounts based on how safe of a driver you are, miles driven, etc. Customers may want this existing functionality expanded to allow different driver profiles, so that a parent might be able to monitor how safe their teenage driver is so they can offer driving instruction as needed based on real-life behavior.
How DevOps Can Transform the Insurance Industry
DevOps methodologies and tools are already in place for Insurtech disruptors and will need to be adopted by other providers to maintain viability in a drastically changing market.
Faster Cycle Times
At its core, DevOps creates the environment where software changes can be defined, created, tested, approved, and released quickly and at the speed business needs. Teams will create Continuous Delivery pipelines that will model the real-world practices that are required by business units and dictated by regulations.
Continuous Delivery pipelines take advantage of automation tools to move changes quickly through processes while getting instant feedback about errors and issues. Truly mature DevOps teams can release approved code in seconds, rather than weeks or months.
The ability to release through Continuous Delivery pipelines new features to customers while innovating based on real customer data will be the hallmark of the insurance provider that adopts DevOps.
A properly set up Continuous Delivery pipeline will combine the best of automation and human interaction that will result in automated logging of data securely and completely. Automated tools will ensure that necessary tests are run and have passed before moving forward. These results will be logged as part of the process.
Pipelines will deploy software without human intervention to input sensitive data (like server locations and passwords). Sensitive data will be stored securely within systems allowing access only to those with approved credentials.
All changes, tests, manual interventions, user actions, etc., that can be performed during a release will automatically be logged. This log records not only what was done but also by whom. This logging will allow for better and faster error resolution while maintaining compliance with governmental regulations.
Automation of Technology and Delivery
Automating the release of software with Continuous Delivery methodologies will not only decrease the amount of time needed to deploy updates to users and maintain compliance; it will also increase availability and up-time of user platforms.
Automated roll-backs will ensure that, if a delivery fails, previously successful software is deployed to maintain current systems. Delivery to disaster recovery environments will ensure that if an insurance portal crashes, it becomes available again in minutes, not hours or days, so that customers will still have access to providers.
Aside from maintaining availability for a better customer experience, automating delivery will save time and money for providers who commit to DevOps.
Automation removes human error from processes, meaning that releases become common-place and frequent rather than a long and drawn out ordeal that requires many different personnel and business units to be involved with.
Removing the human error from processes means the organization saves money, and key personnel can dedicate more time to adding value to the organization rather than fighting deployment fires, working overtime, or hiring sub-contractors.
As strange as it sounds, success with DevOps often leads to the normalization, rather than the celebration, of software releases.
How to move forward with DevOps
If an organization in an established industry isn’t innovating, they are reacting to others who innovate. If Insurance providers can’t adapt to the new reality of the marketplace brought in by the Insurtech disruptors, they'll wither.
To move forward, the methodology of DevOps and innovation must have buy-in at the highest levels of the organization. It will require bold action, big ideas, and the willingness to walk away from processes and procedures that have worked in the past.
Developing Continuous Delivery pipelines to service your customers with better interactions, more innovations, and increased up-time will lay the groundwork for increased market share and maintaining relevance in the industry.
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