How a smarter approach to insurance customer data helps reduce costs and increase revenue

These pressures are particularly evident in general insurance lines, where the demand for personalized services, greater visibility into risk, and effective, dynamic pricing is intensifying. Customers now expect tailored policies that meet their specific needs, with seamless digital interactions that enhance their overall experience.

At the same time, digital-first competitors are gaining market share by offering streamlined, user-friendly digital experiences. These firms leverage advanced data analytics to accurately assess risk and price products, allowing them to keep operating costs low while delivering competitive premiums. This ability to blend personalization with operational efficiency is attracting and retaining customers for the long term, posing a serious challenge to more established players.

Traditional insurers know they need to evolve to meet these challenges, so they’re looking for ways to:

• Digitize the entire insurance value chain to reduce costs and offset revenue pressures.

• Become far more dynamic in developing new products and services to meet emerging demands and move towards new insurance models, such as usage-based insurance (UBI), telematics and data-driven policies, and on-demand insurance.

• Be more innovative, both within their organization and across the ecosystems they participate in.

However, established insurers tend to rely on legacy systems that don’t allow for the levels of dynamism and adaptability required. And with complex interdependencies, often held together by manual processes, a simple ‘lift and shift’ isn’t an option.

In our experience, the best way to overcome these challenges is to build a composable and modular technology ecosystem that enables incremental changes, delivering regular business value that increases over time.

Case in point: Customer data confusion

One common issue with legacy systems is the challenges they create around customer data. During a recent engagement, we identified significant anomalies in customer data that were disrupting the sales process and creating friction in the customer journey. These discrepancies often resulted in mismatched information, making it difficult for the system to handle even minor variations, such as differences in personal details or account history.

This problem became particularly apparent when customers attempted to progress through the digital sales channel, such as moving from a quote to finalizing a purchase. In many cases, the system required manual intervention from customer service teams, delaying transactions and adding operational costs. These inefficiencies not only hindered the seamless digital experience customers expected but also introduced unnecessary complexity into what should have been a straightforward process.

The consequences of these data inconsistencies could be significant, leading to both lost revenue and higher customer service costs. In this case, while the number of affected customers initially appeared small, the size of the business meant the overall impact was considerable. This underscores how even seemingly minor issues in legacy systems can disrupt business operations and stifle growth, emphasizing the importance of modernization.

A collaborative, incremental approach to solve the problem

Like many traditional insurers, the company’s data structures were designed with simplistic business and customer workflows across the value chain, limiting their ability to adapt to evolving customer expectations. This rigidity made it challenging to improve customer interactions and personalize products and services effectively. As a result, the insurer struggled to offer tailored experiences that met the diverse needs of its customers in a seamless, intuitive manner. The inability to provide more flexible, customer-centric solutions hindered its ability to remain competitive in a market where personalized, efficient service is increasingly becoming a differentiator.

The issue extended beyond just the customer data, with a wide-reaching impact across core policy administration systems and several peripheral applications, each managed by separate teams with distinct operational responsibilities. By bringing in an external perspective, we were able to step back and provide a holistic view of the problem, helping the company see the broader implications across their systems and teams.

To address this complexity, a phased approach was essential. We began by creating a comprehensive view of the challenge, aligning it with the company’s business strategy and considering the needs of various stakeholder groups, including customers, partners, distribution channels, contact center agents, and internal engineering teams. Armed with this insight, we presented multiple solution options, each with its pros and cons, allowing both business and technical stakeholders to make informed decisions. Once a solution was agreed upon, we developed a business case to secure buy-in from leadership and all impacted teams.

The final phase involved creating a detailed plan and roadmap, showing how incremental value could be delivered by addressing each impacted application. By clearly communicating the expected outcomes and timelines, we facilitated alignment across all teams, fostering a collaborative approach to tackling a complex issue that no single team could have addressed independently.

Incremental changes create a lasting business impact

At Thoughtworks, our approach to modernization is centered around delivering value incrementally, ensuring that every step in the transformation journey aligns with the organization’s strategic direction. This enables our clients to adapt to change more effectively while controlling the costs associated with large-scale system updates. By breaking down complex modernization efforts into manageable phases, we help insurers maintain flexibility, reduce risk, and consistently generate measurable business value.

Taking a “thin slice” approach to address complex challenges in manageable steps allows insurers to resolve seemingly intractable issues efficiently. In this case, streamlining customer data across all application layers enables the insurer to achieve incremental and sustained business value, including:

• Enhanced customer satisfaction by delivering a seamless and unified experience across all digital channels.

• Simplified compliance through a compliance-by-design methodology, with privacy and security integrated into every aspect of the solution from the start.

• Increased gross written premium (GWP) by enhancing the customer journey and providing greater flexibility for customers to self-serve through their preferred digital channels. Leveraging a modern, scalable architecture along with improved analytics and data insights, the insurer can proactively identify and address friction points, ensuring smoother transactions and a more responsive customer experience.

• Lower operational costs by eliminating unnecessary contact center interactions caused by mismatched customer account details.

Additionally, the insurer now has a comprehensive digital blueprint that extends the modernized architectural framework across other products and lines of business. This approach not only streamlines the ability to replicate these improvements but also ensures scalability, adaptability and consistent delivery of value across the entire organization.

To learn more about how Thoughtworks’ unique combination of strategic understanding, design expertise and engineering excellence can help you deliver superior customer experiences while reducing costs, get in touch.