Before discussing how to develop insurance software, let’s think about the place we are in right now. 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 seen in movies or read about in history books before.
The repercussions of these events for businesses and entire economies have frequently been truly devastating. They’ve made financial security an increasingly hot commodity. The global worth of the Insurance industry is sometimes projected to reach a mind-numbing $ 6 trillion in 2022.
However, the market players the Insurance industry are unlikely to be able to adequately respond to the surge in demand for their services without enough backing from a related industry – Insurtech.
Responsible for equipping the Insurance vertical with the technical tools it needs, Insurtech is currently seeing rampant growth too. In 2021, the global Insurtech market was estimated at $ 3.85 billion. It 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, heavily influenced by the human factor and overwhelmed with the ever-increasing massive amounts of data, will only be on the rise.
This tendency is likely to be bolstered by the arrival of the data security compliance regulations (GDPR, HIPAA, CCPA, SOX, LGBD, DSS, and PCI) that cannot always be adhered to without the corresponding automation.
If you are an insurer on the lookout for Insurance software to automate your business, there are many meaningful nuances for you to know. In our article, we’ll tell you about these nuances. We’ll also share some of the related insights we’ve gleaned, but first a small note on current trends.
Trends in Insurance Software Development
As of 2023, companies will most likely continue to move forward in digital transformation and automation. The use of AI-powered tools for risk assessment, fraud detection, customer segmentation, that of chatbots for customer support, and the use of personalized pricing models will only be on the rise.
IoT, telematics, and usage-based insurance will continue to drive digital transformation, as they have been doing for several years.
Additionally, we should expect a rise in the popularity of no-code tools, allowing more non-tech experts to leverage Insurtech advancements.
The main types of Insurance software functionality and some ways to implement it more optimally
Insurance software is an umbrella term, 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.Usually, it is one of the constituent modules of a larger insurance solution.
|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
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 to implement 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 customers. It enables 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. This allowed them to calculate the approximate cost of an insurance program for a given customer.
The manual intake of data often involved lengthy telephone conversations. Frequently, the customer had to visit the insurer’s premises in person. Having to obtain and compare quotes from multiple insurers peeved prospects. It 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. It has enabled 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 would like to renew their policies can easily fill in their required details to receive estimates for pay-outs.
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, age, gender, place of residence, medical history, and use of tobacco.
For Commercial insurance, the customer-provided data must include a host of other important details. These details have to do to with the client business’s field of operation. It is essential that the corresponding functionality work dynamically to capture 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. It took us an additional effort to gain an understanding of how this functionality must function in dynamics.
Usually, an insurance software solution is composed of a calculation module, customer interaction functionality, and an integration with a CRM.
Also, one should bear in mind that in essence quoting insurance 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. They must be able to do so 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 questions that need to be answered instantly. In this sense, it is definitely worth considering implementing an advanced Chatbot.
- For certain types of insurance quoting functionality, you can consider employing advanced data modeling 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 promptly generate life insurance quotes, 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. This kind of integration allows you to store customer data and automatically fill in data for repeat customers. You can use the prospect-provided data for creating customer proposals. With CRM integration, it becomes easier to update customer data. Besides, it makes it possible to attract a larger number of insurance brokers by allowing you to easily exchange this data with them.
With Insurance quoting software, you can also gain more marketing exposure by getting your quotes featured by 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 risks while insuring the client’s life, health, assets (for example, a home), or chattels (for example, an automobile). Underwriting insurance software 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. Usually, underwriting applications also allow managing submission queues and any related tasks.
Regardless of the type of insurance they are intended for, insurance underwriting applications are the kind of software that benefits vastly from Artificial Intelligence and Machine Learning. For example, in Commercial insurance, AI/ML can dramatically improve your underwriting-related Risk Management by allowing you to take 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 data provided by GIS and iOT networks.
Another area in which AI can give you an edge is defining your pricing policy for the different client profiles.
Advanced underwriting software can pose quite a challenge if you are building it from the ground up. However, any insurance business that thinks long-term must consider this possibility as one of the pivotal factors in scaling up their insurance business operations.
Insurance claim management software
This kind of insurance software generates and processes insurance claims.
Customers use the client side of insurance claim management applications to create a claim, whose authenticity is then verified by the system. A claim management application processes valid claims in accordance with predefined rules. Usually, this kind of insurance software also handles 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 their claim’s current status. The end clients must be able to get familiar with the claims that are about to be filed on their behalf. The provided set of claim templates must include both less and more detailed templates, including ones for those cases that involve interactions with 3d parties.
A full-blown insurance claim management solution should also include mobile functionality for both end clients and adjusters. The end clients must be able to use your mobile app to both create and file an insurance claim and share this claim with their insurance agent in order 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 both servicing insured clients and underwriting new ones. They also allow one to manage the related insurance policies and other records by easily locating and modifying them as required.
Typically, Agency CRM software comprises several functional modules.
The Customer Management functionality of an Agency CRM provides a client database. This database stores client information like client personal info, purchase history, preferences, past interactions, the lead source, and contact information. It allows insurance brokers to identify hot leads, keep track of them, and evaluate client performance over time.
The Document Management functionality of an Agency CRM allows 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. The functionality makes it possible to upload, manage, and submit for approval different versions of insurance documents.
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: the omission of any meaningful details or any possible outages can hamper one’s business interactions and easily result in lost customers or financial losses. As there can be numerous regional and other situational nuances, it might be a good idea to first mingle at some length with your brokers, get a better understanding of their actual needs, and then share your learnings with your insurance software development company.
It might be smart to enable your insurance brokers to impose privileged access to your digital assets for the different user categories. As insurance brokers use different operational systems, one should implement a Cross-Platform module to allow them to do this seamlessly.
The arrival of GDPR and other similar compliance regulations has created the need to implement one more important function. This function is the ability to quickly and effortlessly eliminate client records and any related documents, or anonymize this data. It is critical to implement this capability in such a way that any of your existing clients can easily request this. One must make sure that the corresponding input, captured by your system is attended to without fail or delay. Also, one should probably allow for the use case, whereby an end client approaches one of your insurance brokers 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. Policy creation and management software 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. Besides, the functionality must also include a capability that allows creating new lines-of-business.
Similar to this, on the lower, product level, the software must provide multiple default product patterns. The user must be able to modify these product patterns and create custom product instances.
Lastly and importantly, your insurance policy creation and management software must allow dynamic product configuration. This must include 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 allow the user to make a quick search through the document database. It must be possible to use multiple search criteria like, for example, document type, document date, and document status.
Your document management functionality must also be claim-centric. This means that you must be able to search for, group and retrieve all the documents that pertain to a specific claim, and link these documents. The documents must come up on the search results along with all the documents that are attached to them. It must be possible for the user to share the entirety of this documentation package with other relevant actors.
The must-have features of insurers’ documentation management software 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.
An insurance document management application must make it possible to update all documents within a documentation set simultaneously. When this makes sense in your business situation, you may also want to employ AI to provide the ability to enhance or update documents by using information from social media and other sources on the Web.
Just like with 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 day-to-day operations of insurance companies. It allows managing these operations, including marketing campaigns and other marketing activities, sales, compliance-related activities, and resource management.
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 many times more vulnerable to cyberthreats and data compromise than businesses in about any other industry.
Because of this and 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 any possible malicious actors within the insurer’s ecosystem.
What exactly must one do to make sure your insurance application is secure enough?
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.
You must first implement two-factor or multi-factor authorization for all your system users – both internal (your employees) and external (clients and brokers) ones.
Next, you can implement privileged access to certain parts of the system’s functionality. You can allow only authorized employees to access this functionality. One must do this 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 must support creating new user types with privileged access entitlements.
As an option, you can also implement privileged access for certain types of your digital assets. For some of your user roles, you can implement access without the ability to share, print out, email, or download information. As an alternative, you can also provide the ability to share information with authorized users only.
It is possible to secure privileged access to your critical digital assets additionally by implementing 2FA already within the system.
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 those 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.
Secondly, you can gain more visibility into your employees’ activity by video-recording all user sessions of your privileged users, or even all your employees.
One of the principal safeguards that protects the security of your insurance businesses is data encryption. The imposition of regulatory compliance like the GDPR has made this security tool mandatory. In this regard, it is both a necessity and a must to protect all data and assets that pertain to the kinds of information that are to be protected for your type of insurance.
Please note that the collected sensitive information can vary for the different insurance types. Because of this, you first need to find out the precise types of sensitive information to be protected in your case. One should do this before the development of the corresponding 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, this can be AES-256 or SHA-256 data encryption.
Additionally, make a point of requesting your insurance software provider to perform penetration testing of your insurance application. If your insurance software solution is deployed in the Cloud, they must also conduct a cloud security audit to make sure that the security of your cloud is in keeping with your insurance company’s security policy.
The submission of bogus claims, that of unverified data, and a growing number of scams (such as, for instance, the use of Synthetic ID) increasingly create a great deal of trouble and 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 that can 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 this person. The techniques one can use here 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. This technology analyzes a totally unique biometric – the iris of the human eye.
Scalability of insurance software
It is imperative that all modules of your insurance solution be infinitely scalable. This means that they must support creating any new types of actors, services, service packages, sales channels, and documents whenever required.
Given the complexity of the insurance business processes, implementing insurance software is a necessity for any insurance company that wants to evolve and scale up their operations.
To develop a robust insurance solution that is well-suited to your business needs, you need to be aware of a number of factors and nuances. This will allow you to control the development process. Besides, you will be able to help your IT provider capture your business needs more fully.
Also, it is certainly necessary to choose a custom software development provider that has the right competences and experience.
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 mobile and web development services that are of importance in the development of insurance systems. They are also conversant with many technologies that could benefit this kind of software development.
If you are looking to develop an insurance application and still have some related questions, or would just like to find out about how to implement your project better, we are here to help.
Just contact us, and we won’t be long to reply.
How can Agile methodologies benefit insurance software development projects?
Just like with projects in any other industry, Agile is able to offer more flexibility and adaptability, provide faster time-to-market, offer enhanced transparency and boost overall productivity.
Are there any specific programming languages or frameworks, recommended for insurance software development?
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