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Best practices and hands-on tips from a development team with experience in the development of insurance software 

Over the past decade, the world has been a volatile place. We have witnessed pandemics, calamities, and conflicts the ilk of which most of us had only previously seen in movies or read about in history books. The repercussions of these events for businesses and entire economies have frequently been truly devastating. Financial security has become an increasingly hot commodity, traded in an industry, whose global worth is sometimes projected to reach a mind-numbing $ 6 trillion in 2022.

However, the market players in this industry – the Insurance industry, are unlikely to be able to adequately respond to the ongoing surge in demand for various insurance services without enough backing from its sister industry – Insurtech. Responsible for equipping the Insurance vertical with the technical tools it needs, Insurtech is currently seeing rampant growth too. The global Insurtech market that in 2021 was estimated at $ 3.85 billion is projected to be growing at a staggering CAGR of 51.7 % from 2022 to 2030 (Grand View Research ). Looks like the demand for robust and efficient software in the Insurance industry that is heavily influenced by the human factor and overwhelmed with massive and ever-increasing amounts of data will only be on the rise.

This tendency is likely to be bolstered by the imposition of the numerous data security compliance regulations (GDPR, HIPAA, CCPA, SOX, LGBD, DSS, and PCI) that, in most instances, cannot always be adhered to without the corresponding automation, but can sometimes skyrocket the cost of a human error-caused mishap.

If you are an insurer on the lookout for Insurance software to automate your business, there are numerous meaningful nuances for you to know to be more in control of your project’s implementation. In our article, we’ll call your attention to some of these nuances, as well as share the learnings we have gleaned when coming to grips with various insurance software development challenges as an R&D team.

The main types of Insurance software functionality and some ways to implement it more optimally

Insurance software is an umbrella term that is used to describe several types of software applications. Applications of each of these types automate a certain aspect of an insurance company’s operations.

More often than not, the insurance functionality of a certain type does not appear in the form of a separate software application but as one of the constituent modules of a larger insurance solution.

Functional Module
Insurance quoting software
Insurance policy creation and management software
Insurance underwriting software
Insurance claim management software
Insurance Agency CRM software
Insurance workflow automation software
Insurance document management software

So, let’s first briefly describe each of the types of the software functionality insurance companies use, and then pinpoint the related pitfalls, or suggest ways of implementing these functions more optimally.

Insurance quoting software

Insurance quoting software is intended to automate the initial phase of an insurance company’s interactions with their prospects and repeat customers by enabling them to quickly obtain quotes for specific insurance programs. It does not, as some mistakenly believe, help compose or conclude any insurance agreements.

Still, the importance of insurance quoting software can hardly be overestimated. Prior to the advent of this kind of systems, insurers used extremely time-consuming and cumbersome manual quoting and rating processes.

To come up with a quote, they had to compare their company’s insured costs against the profile and needs of each and every specific prospect, which then allowed them to adjust accordingly and calculate for this customer the approximate cost of the insurance program the customer was interested in.

The manual intake of data often involved lengthy telephone conversations and the need for the customer to visit the insurer’s premises in person. Obtaining and comparing quotes from multiple insurers peeved prospects, took up lots of their time, and created friction in insurance companies’ dealings with their insurance brokers. Insurance quoting software has eliminated all of this hassle, allowing insurers and their customers to interact promptly and efficiently.

In essence, quoting applications allow insurers to flexibly create various predefined negotiation scenarios. Prospects and those clients who are looking to renew their policies can easily fill in their required details to receive estimates for the pay-outs they can be entitled to.

The prospect’s data that needs to be provided varies depending on the kind of insurance they are applying for. For example, for property insurance, along with the personal info, this data typically includes an existing mortgage or debt. For life insurance, it can include health-related information, the prospect’s age, gender, place of residence, medical history, and use of tobacco.

For Commercial insurance, the customer-provided data must include a host of important details associated with the client businesses’ field of operation. Furthermore, it is essential to implement this functionality so that it dynamically tracks the diverse number of changes any business is constantly undergoing. For instance, in one of our projects, our R&D team has developed a corporate workers’ compensation insurance solution, and it took us an additional effort to gain an understanding of how this functionality must function in dynamics.

On average, an insurance software solution is composed of a calculation module, customer interaction functionality, and an integration with a CRM.

While implementing an insurance quoting solution, it is imperative to bear in mind that in essence such applications serve doubly as marketing solutions. In this regard, there are several points one should take into account during the development process:

  • The frontend of your insurance quoting software must be both extremely user-friendly and visually appealing. From the outset, it is best to lay out and implement your quoting page as a selling landing page.
  • A visitor to your insurance quoting website must be able to obtain a quote effortlessly and without having to first get registered to the site.
  • Insurance quoting software is just the kind of software that benefits a great deal from Chat functionality. So much so, that this is more of a must-have for such apps: prospects tend to have some questions when applying that need to be answered instantly. In this sense, it is definitely worth considering the use of an advanced Chatbot to help ensure this.
  • While implementing certain types of insurance quoting functionality, you can consider employing advanced data modeling with a view to being able to calculate the various related risks. For instance, in the case of quoting functionality for Life insurance, data modeling can eliminate the need for prospects to take a medical exam as is done under the traditional manual quote generation. In addition to enabling you to generate life insurance quotes expeditiously, data modeling can also help you stay more competitive by calculating the prices for the different customer segments more optimally.
  • CRM integration can on no account be considered as frills or something secondary to the rest of your quoting software. With this kind of integration, you can store customer data, automatically fill in data for repeat customers, use the prospect-provided data for creating customer proposals, easily update customer data, and attract a larger number of insurance brokers by being able to easily exchange this data with them.

With Insurance quoting software, you can also gain more marketing exposure by getting your quotes featured by those sites that provide quotes from multiple insurance companies. This, in turn, can increase the number of your client relationships.

It should be mentioned that online insurance quoting software is something most prospects love. It simply revolutionizes the customer experience you deliver.

Underwriting insurance software

This kind of insurance software allows insurers to evaluate the risks they are faced with in insuring the client’s life, health, assets (for example, a home), or chattels (for example, an automobile). It includes a rating engine that automatically calculates insurance premiums in accordance with the corresponding coverage.

With underwriting software, you can typically define complex risk evaluation rules that can then be relevantly applied in each specific case. Underwriting applications also usually allow one to manage submission queues and any related tasks.

Regardless of the type of insurance it is intended for, insurance underwriting applications are the kind of software that benefits vastly from Artificial Intelligence and Machine Learning. For example, as far as Commercial insurance is concerned, you can harness AI/ML to dramatically improve your underwriting-related Risk Management by taking into account a much broader range of risk factors. These risk factors can then include geopolitical information, legal sources, media and social media, and even GIS- and iOT networks-provided data.

Another area in which AI can give you an edge is the definition of your pricing policy for the different client profiles.

Advanced underwriting software can pose quite a challenge to build from the ground up. However, any insurance business that thinks long-term must consider this possibility as one of the pivotal factors in being able to significantly scale up one’s insurance business operations.

Insurance claim management software

This kind of insurance software is intended for the generation and processing of insurance claims.

Customers use the client side of insurance claim management applications to create a claim the authenticity of which is then verified by the system. A claim management application processes valid claims in accordance with predefined rules. Usually, this kind of insurance software is also used to handle claim-related payments. It stores information on any relevant dates, deductibles, payment components, and outstanding claim reserves.

While implementing an insurance claim management application, one should allow for claims being reported by clients, corporate and freelance claim adjusters, and intermediaries. All these actors must be able to attach various types of documents used for the type of insurance in question, as well as photos of incidents. Each of the actor types involved must be able to easily monitor the claim’s current status. The end clients must be able to get familiar with the claims about to be filed on their behalf. The set of the provided claim templates must include both less and more detailed templates, including ones intended for those cases that involve interactions with 3d parties.

A full-blown insurance claim management solution should also comprise mobile functionality for both end clients and adjusters. The end clients must be able to use your mobile app to not only create an insurance claim and file it, but also share it with their insurance agent to get their professional advice. An insurance agent must be able to modify a claim when approached for advice. Your mobile app must also enable the client to monitor the processing of their claim.

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Agency CRM software

Insurance CRM software enables insurance brokers to keep track of insurance events and various actors’ actions in a centralized manner and within a specified time frame.

With this software, agents and sales reps can efficiently communicate with customers. Insurance CRMs allow one to both service insured clients and underwrite new ones, as well as manage related insurance policies and other records by easily locating them and modifying them as required.

Agency CRM software typically comprises several functional modules.

Customer Management

The Customer Management functionality of an Agency CRM provides a client database that stores client information that includes client personal info, purchase history, preferences, past interactions, the lead source, and contact information. It allows insurance brokers to identify and keep track of hot leads and evaluate client performance over time.

Document Management

The Document Management functionality of an Agency CRM focuses on allowing insurance brokers to capture, store, and share customer documents. This can include a wide range of customer insurance policies, claim templates, accident reports, insurance certificates, and more. It makes it possible to upload and manage the different versions of insurance documents and submit them for approval.

Task Management

The Task Management functionality of an Agency CRM allows creating a variety of time-framed tasks and assigning them.

The Agency CRM functionality is of great importance to any insurance solution. It must be well-thought-out and robust, as the omission of any meaningful details or any possible outages can hamper business interactions or easily be fraught with lost customers or financial losses. As there can be numerous regional and other situational nuances, it might probably be better to first mingle at some length with your brokers in order to get a better understanding of their actual needs and impart these needs to your insurance software development company.

It might be important to enable your insurance brokers to impose privileged access to the different digital assets for different user categories. As insurance brokers use different operational systems, one should implement a Cross-Platform module that will allow them to do this seamlessly.

The arrival of GDPR and other similar compliance regulations has created the need for one more function that you need to implement – the ability to quickly and effortlessly eliminate client records and any documents that pertain to them, or to anonymize this data. It is important to implement this capability so that an existing client can easily request this, and the input captured by your system is paid due attention to without fail or delay. One should probably allow for the use case when the end client approaches one of your insurance brokers directly with a request to eliminate their data.

Policy creation and management software

This kind of insurance software is intended for the creation, tracking, renewal, and cancellation of insurance policies. The solution must also include change request and notification functionality, including email, SMS, and on-screen notifications.

The policy creation workflow of your application must have a multi-tier product creation and management hierarchy. On the line-of-business level, it must provide a range of default lines-of-business (for example, commercial property or healthcare) within which products (or, in other words, policies) can be created, as well as a capability for creating new lines-of-business.

Similar to this, on the lower, product level, the software must provide multiple default product patterns, as well as a function that allows the user to modify them and create custom product instances.

Lastly and importantly, your insurance policy creation and management software must allow dynamic product configuration, spanning policy forms, rules, rates, any policy-related documents and indemnity.

Document management software

Document management software is intended to store, search, and access various insurance documentation, including policy applications, policyholder agreements, customer proofs, and more.

Such software must enable the user to quickly make a search through the document database by using multiple criteria, such as, for example, document type, document date, and document status. The document management functionality should also be claim-centric: you must be able to search for, group and retrieve all the documents pertaining to a specific claim, and link these documents. The documents must appear with all the various documents attached to them. It must be possible for the user to share this documentation package in its entirety with other relevant actors.

The must-have features of an insurance company’s documentation management insurance also include advanced annotation, stamping, and collaboration capabilities. An authorized user must be able to make notes on a shared document, including the ability to do so over photos or images within documents. The user must be able to easily submit a single document or a set of documents to another authorized user for review and approval.

The functionality of an insurance document management application must make it possible to update all documents within a documentation set simultaneously. In some instances, when it makes sense in your business situation, you might also want to employ AI to provide the ability to enhance or update documents by using information from social media and other sources from across the Web.

Please bear in mind that, similar to the way this should happen in your Agency CRM insurance software, your insurance software development company must provide the ability to delete or anonymize a client’s documents upon their request.

Insurance workflow automation software

Insurance workflow automation software automates and allows managing the day-to-day operations of insurance companies, including marketing campaigns and other marketing activities, sales, compliance-related activities, and resource management operations.

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Overall system requirements: several more things of which one must be aware

Security of insurance applications

Data insurance companies hold vast amounts of personal and other critical data that travels across many diverse endpoints. This often makes insurers scores of times more vulnerable to cyberthreats and data compromise than businesses in about any other industry.

Because of this, and due to the nature of the business environments they operate in, insurance applications need to be reliably secured on two different levels – external and internal ones. While in the former case it deals with malicious attacks from outside the insurance company’s ecosystem, in the latter case safeguards need to be put in place against those malicious actors, who operate from within the insurer’s ecosystem.

So, what exactly can and must be done in this department to make sure your insurance application is sufficiently secure?

Types of security in Insurance software

When it comes to security, it is imperative that one pay enough attention to four things –privileged access management, employee monitoring, data encryption, and fraud detection.

Privileged access

You must first implement two-factor or multi-factor authorization for all your system users that want to enter the system – both internal (your employees) and external (clients and brokers) ones.

Next, you can implement privileged access to certain parts of the system’s functionality to allow only authorized employees to access this functionality. This must be done for both your built-in accounts of certain types and for any accounts of the same types that will be created in the future. Because of this, your solution’s functionality must also support creating new user types with privileged access entitlements.

As an option, you can implement user access with varying access clearance for certain types and classes of your digital assets stored in your system. For some of your actor roles, you can implement access without the ability to share, print out, email, or download information, or, as an alternative, provide the ability to share information with authorized users only.

It is possible to secure privileged access to your more critical assets additionally by implementing 2FA already within the system.

Employee monitoring

Employee monitoring is another important component of your security ecosystem. What can you do in this regard?

First off, you can implement automatic real-time notifications for any actions taken in relation to the more important of your assets that can only be accessed by users with the corresponding privileges. It is also possible to define any user actions that can be considered suspicious, and implement a set of corresponding rules for the system to generate real-time alerts in response to any of them.

Secondly, you can gain more visibility into your employees’ activity by video-recording either all user sessions of your privileged users, or even those of all your employees.

Data encryption

One of the principal safeguards that protects your insurance businesses’s security is data encryption. This security tool has also been rendered mandatory by the imposition of regulatory compliance like the GDPR.

In this regard, it is both a necessity and a must to protect all the data and assets that pertain to the kinds of information that need to be protected for your type of insurance. Please note that the sensitive information to be collected can vary for the different insurance types. Because of this, you need to find out the precise types of such information you need to protect in your case before the development of this functionality kicks off.

For instance, if you need to collect Health data, the information to be protected can include the Health provider, blood type, pregnancy, diseases, disabilities, and the ICD code. If you need to collect Property data, the information to be protected can include Vehicles, Intellectual Property, Pets, Real Estate, Land Contracts, and Mortgage Agreements.

To protect sensitive insurance data, you need to request your insurance software provider to apply some reliable modern encryption means, for example, AES-256 or SHA-256 data encryption.

Additionally, make a point of requesting your insurance software provider to employ penetration testing in the testing of your insurance application.

In the event that your insurance software solution is deployed in the Cloud, they must also conduct a cloud security audit to make sure that your cloud’s security is in keeping with your insurance company’s security policy.

Fraud Detection

The submission of bogus claims, that of unverified data, and a growing number of scams, such as, for instance, the use of Synthetic ID that is presently becoming notorious increasingly create a great deal of trouble and even more financial losses for insurers.

To be able to counter these insidious threats, you need to look into the possibility of employing some of the bleeding-edge AI, ML, and Data Science techniques in order to protect your insurance solution. What exactly should one first pay attention to?

  • Predictive behavioral analytics functionality can help identify applicants that intentionally provide incomplete or spurious data by the way they behave and handle questions during the application process.
  • Behavioral biometrics can help verify whether you are really dealing with the person The techniques this approach can use to ensure this include Voice ID verification, signature analysis, keystroke dynamics, gait analysis, and cognitive biometrics.
  • AI and ML-based data analysis that can help gain a better picture of the applicant by using a large amount of data and a larger number of data sources.

It should be noted that for reliable Identity Verification, you could also opt for advanced ID Verification software that makes use of Iris Recognition – a technology that analyzes a totally unique biometric – the iris of the human eye.

Scalability of insurance software

It is imperative that all the modules of your complex insurance software solution be infinitely scalable. This means that they must support the creation and addition of new types of actors, services, service packages, sales channels, and documents wherever required.

Conclusion

Given the complexity of insurance business processes, implementing insurance software is a necessity for any insurance company that wants to evolve and scale up their operations.

To achieve this, you need to be aware of multiple diverse factors and nuances in order to be able to control the development process and help your IT provider carry your plans into effect. Besides, it is certainly also necessary to carefully choose a custom software development company that is truly capable of tackling this challenging task.

Summary

There are four types of security that need to be taken care of in insurance software: privileged access, employee monitoring, data encryption, and fraud prevention.

The main types of Insurance software applications include insurance quoting software, insurance policy creation and management software, insurance claim management software, insurance document management software, and insurance workflow management software.

Our R&D team has a wealth of experience in building endlessly scalable, high-load enterprise-grade software with intricate and wide-ranging functionality, including sophisticated workers’ compensation insurance software. Our experts are well-versed in the many aspects of custom software development that are of a lot of importance in the development of insurance systems. They are also conversant with many technologies that could benefit this kind of software development.

Because of this, if you are looking to develop an insurance application and still have some related questions, or would just like to learn more about how to implement your project better, we are here to lend a hand.

Just send us an email at [email protected], and we won’t be long to reply.

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