In today’s fast-paced world, the only constant is rapid change. While change has been a buzzword across all industries, insurance was often perceived as slow and unyielding due to its complex regulatory environment and the nature of its products. However, the last decade has turned this perception around. The insurance sector has seen significant tech transformation, product innovation, the emergence of new forms of insurance, and the proliferation of players.
What defined the last decade in terms of tech adoption for insurance, and what will take precedence in the next decade? Sumanas Kar, Regional Director for India and South Asia Sales at Vymo, and Venkat Malladi, co-founder and CTO of Vymo, catch up over coffee to discuss the tech trends in insurance, especially from a distribution perspective.
The Last Decade of Tech Adoption in Insurance
Sumanas:
“Venkat, you’ve worked with some of the largest insurance organizations in the past decade. How would you summarize this decade in terms of tech adoption?”
Venkat:
“The primary differentiator for insurers was the products they had in the market. Hence, the initial focus was to invest in tech to help align their core processes—underwriting, claims, and so on—with a primary focus on risk. Additionally, creating leads and opportunities led most large organizations to invest in CRM systems, focusing mainly on pipeline management. Once this component was fixed, the focus shifted towards customer experience and, to some extent, seller experience.”
Sumanas:
“So, if we really look at it, the seller has not been the focal point while implementing technology in the previous two decades—even though CRMs are supposed to be seller-centric. The focus has always been on risk, pipeline, and customer experience. I do not think we have solved for the seller by means of solving for other personas. What do you think?”
Venkat:
“I agree. The seller lifecycle is fragmented across different systems. For example, systems like commissions and compensation are retroactive—they compensate the seller for sales already made, rather than supporting proactive performance management. Other standalone solutions like document management or learning systems also do not prioritize the seller as the primary persona.”
The Need for a Consolidated View of Sellers
Sumanas:
“Does this mean that no insurance organization has a consolidated view of the seller? This can be a disadvantage because exceptional customer experience is directly proportional to exceptional seller experience. Even if an insurance organization wants to improve seller productivity, they don’t have a 360-degree view of the seller persona.”
Venkat:
“Yes. Most systems are focused on the customer’s persona, and for good reasons. Insurers must identify, attract, and then retain customers after the sale. However, to empower and enforce this, there is an urgent need to focus on the seller persona as well. How can insurers enable their distribution network with tools that increase productivity, focus on customer engagement, and follow best practices to close sales?”
Sumanas:
“Yes, but this is sales engagement and enablement in a nutshell—lead management, activity management, and mobile-first access to sellers. That has been happening over the past decade by solution providers like Vymo, and others. Is there anything more that I am missing?”
Venkat:
“Let me elaborate. In the past decade, solution providers have offered mobile-first tools, lead management, activity management, data-led insights, and more for insurance sellers and distributors. But going forward, we need to address two imperatives:
- Mend the seller lifecycle, creating a seamless journey across the distribution network.
- Develop a unified view of sellers and the larger distribution network they are part of.”
Reimagining Insurance Distribution Systems
Sumanas:
“While this sounds promising, it involves rethinking the entire insurance distribution system with a fresh perspective. It also means reworking the tech stack, which is daunting but worth it since it will unlock tremendous opportunities for sellers. Such a distribution management system would work on a common data pool spread across divisions in a large insurer. Is that correct?”
Venkat:
“Yes. Insurance carriers have an enormous volume of data. An Accenture report stated that large organizations typically analyze only 12% of their data. This is because data is siloed and spread across lines of business and standalone systems, preventing them from unlocking the full value of their data. A distribution management system for insurers will work on a single pool of data and a common data model, harnessing the immense amounts of data that insurers possess.”
Sumanas:
“Got it. But again, will this be seller-focused?”
Venkat:
“To truly provide value to the business, any distribution management system built should be seller-centric. Key features of such a system include:
1. Core Data Component:
- Several banking experts advocate for data centrality over core banking centrality for future banks. This principle applies to insurance as well, emphasizing a data-centric view where seller data is a key element.
2. Hierarchy-Cognizant System:
- Insurers have multiple divisions and product lines sold through the same distribution network. Currently, systems managing these hierarchies are disparate—HRMS, compensation tools, etc. A unified distribution management system can bring different hierarchies (reporting, distribution, channel partners) onto one platform.
3. Unified Seller Journeys:
- The seller lifecycle is typically fragmented across multiple systems. Addressing this requires unifying all elements of a seller lifecycle into a single, coherent journey.
Once you devise a strategy to build a solution incorporating these three components, the next step is to develop playbooks for different personas. Leveraging AI and Large Language Models (LLMs) can drive powerful insights across the distribution hierarchy, fundamentally changing how distribution operates. Even with all this, we’re just scratching the surface.”
Sumanas:
“This sounds like a great blueprint for the future of insurance distribution. With a data-centric approach and emerging AI and ML capabilities, significant opportunities await insurers, potentially transforming how insurance is sold!”
