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Can Traditional Insurance Companies Compete with Disruptive Insure-Tech?

Can Traditional Insurance Companies Compete with Disruptive Insure

How Aureus Tech Systems is Helping Traditional Insurance Companies Win Using Data Powered by Cloud and AI

Aureus Tech Systems realized that the solutions and products they’ve built —and were building—would be extremely valuable within the insurance sector. Because of these adjacencies, Aureus decided to enter the insurance space. One of the first things Aureus saw was a glaring issue: most insurance companies had a combined ratio of around 100% (a solid combined ratio is 75 – 90%). A healthy combined ratio means that a large premium is earned to cover the actual risk. When we took a deeper look at why, the data showed that most insurance companies were struggling with two of the three parameters:  a. loss from operations b. loss from claims or c. earned premium.

Another issue Aureus saw is that most insurance companies are competing with segment-specific start-ups that use new technology to develop a parametric insurance model. In other words, these insurance disruptors have developed parameters using AI-based algorithms that quickly determine whether or not they need to pay out a claim, and then pay out that claim quickly to their customer—a much more efficient and cost-effective way than having a traditional adjudicator manually ascertain this and then follow a lengthy claims process. Therefore, insurance disruptors’/start-ups’ operational cost is significantly lower than traditional insurance companies. This positively impacts customer resilience and satisfaction in event of a loss, challenging the profitability of traditional insurance companies.

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Aureus knew that they could 1) improve insurance companies combined ratio and 2) help insurance companies stay competitive and profitable through a) Aureus AI-powered accelerators built in the serverless cloud and b) expertise on Azure appliances. Aureus’s goal is to help traditional insurance companies utilize their largest asset and key differentiator (their long-existing data) through the use of intelligent, cloud and AI-based technology to transform them into true knowledge companies in order to compete and outperform new insurance companies entering the market.

Turning data into key insights and becoming a true knowledge company is essential for traditional insurance companies if they want to remain relevant and profitable. The issue is, traditional insurance companies are not able to do that with the existing tools they have, as they do not allow for 1) the transformation of data into insights and 2) every employee who touches the customer to have access to those insights. The way most insurance companies are structured today is very siloed. They have separate systems for each department, like Salesforce for CRM, Guidewire for policy administration, and specific systems for claims and technical accounting. Then, the data from these separate systems are collected in a data warehouse that aggregates all the data and delivered to management, never touching the employees who interact with the customer, thus causing convoluting processes and frustrated customers. But, in today’s world, decisions are not just being made by the management team. Every human who touches the customer through their journey should be able to make intelligent decisions based on information and insights. Aureus gives insurance companies the computing power to glean these insights and make the right decisions.

“This is where the power of a technology ecosystem that utilizes cloud and AI capabilities comes in. Aureus builds decision intelligence into the overall insurance value chain and empowers both the company and the individual employees—from the C-suite to the front-line— to make the best decisions for their customers and themselves,” said Abhishek Pakhira, COO, Aureus.

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Aureus wanted to double down on bringing intelligent technology into the insurance value chain, offering valuable insights to every employee that touches the customer. Advanced technology paired with domain expertise and industry experience is the secret sauce to building the most effective insurance solutions, so Aureus brought in the best person to offer this specific expertise; an expert who could create a robust and a detailed roadmap and strategy for our insurance customers: Debjit Kanjilal (DK).

DK comes to Aureus with 19 years of experience in the insurance sector, bringing true thought leadership to Aureus. DK has been part of leadership team of one of the prominent Commercial Insurance companies in growing by almost 100% in 5 years. DK’s strategic leadership have helped organizations achieve growth objectives by using technology as a catalyst. DK brings to the table traditional IT leadership expertise in overseeing large enterprise-wide projects including cloud migrations, SaaS implementations, and inhouse solution builds on a global scale.

“Most companies are data rich and information poor. The reason can be attributed to fragmented systems, non-standard processes and data definition across enterprise complemented with lack of tools that could mine information from unstructured data like Policy/Claims/Risk Engineering documents. This leads to information barriers running organizations blind. This is where Cloud Infrastructures and serverless appliances, along with accelerators from Aureus R&D, can help transform companies towards a favorable combined ratio. I truly believe that the day has come where all companies regardless of lines of business— has to be a tech company and follow the trend of ‘IT is Business!'” – DK Kanjilal, Managing Director of Insurance Solutions, Aureus.

Aureus Tech Systems is a Microsoft Certified Gold & Co-sell partner and product engineering company that offers enterprise Cloud and AI solutions. Aureus offers Office365 Development, AI & Big Data, Modern Workplace, IoT, CRM, Customer Engagement Management (CEM), and eDiscovery solutions all in one unified Microsoft Azure native cloud platform.

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[To share your insights with us, please write to sghosh@martechseries.com ]

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