There is no common definition of established operating model for insurance. An operating model is a representation of the reality of implementation of operations and IT support business processes. A business model defines how the company makes money; operating model defines how the company is organized to ensure that it actually makes money.
A World Class Operating Model is the best Target Operating Model for the company, defined relative to the external market and internal management and culture. World Class defines excellent organization able to deliver shareholder value, consistently high profit and growth with agile organization able to adapt to market changes.
A World Class Operating Model supports companies to optimize all the improvement efforts to ensure the promised return on investment and prevent the introduction of new problems of incomplete or incorrect changes caused by lack of overview or the ability to deliver complex solutions .
There are many examples of world class organizations around the world with outstanding service and optimize internal processes and IT; However, in the industry it is difficult to find a world class organization. Ask customers, distributors and even internal management and insurance company employees and the overall perception is quite bad. There are of course examples of dramatic improvements, most of the time covered only part of the organization.
The goal of World Class Operating Model is to define the organization able to deliver excellent services and products with low cost, reliable, scalable and sustainable operation and the IT organization, which is fast and flexible, adaptive market.
Where in most cases, the operating model of Insurance organization is a complex maze of processes, IT and governance implemented in controlling the manual creation, the state of the art World class operating model is based on a full service digital agency with high skilled professionals for product development, marketing, sales, consultancy, claims management and customer service.
A World Class Operating Model for Insurance is based on the following principles:
Availability real contact time
One often heard complaint of customers and distributors is the lack of up-to-date information in the service process, especially in the case of a claim. Call centers and internal staff simply have no access to the most recent data and must wait until the paper files are available. An important rule of world class operating model is that all information is digital, up-to-date and real-time available create excellent service, fast deliver & claim process and real-time view of production and productivity.
Fully digital self-service capabilities
Today, all information should be available in real time, anywhere, anytime, on every computer and mobile used by customers, distributors, internal management and staff and third party service providers. It will save tremendous time and money when customers and business partners have access to all information via the internet, on tablets, phones, etc. and are able to get quotes for new products and renewal, send customer and product information, policy recommendations, and changes and load demand information. The world class operating model, are digital self-service capabilities fully integrated with comprehensive sales support and customer relationship management systems.
Straight Through Processing
The complex manual processes for insurance organizations resulting in most of the service problems. Backlogs, lack of perspective, re-enter data, the manual mistakes cause deterioration in service and high rate costs. A World Class Operating Model organizes all processes in plain, simple models. This model is fully automated without any manual interference except for decision-making as assessment and underwriting requirements. All data will be entered in one of the system and will be transferred directly through to other systems where no back data is essential.
Fast time to market
Time to market insurance products is long, even small changes in pricing will take months to deploy in most insurance companies. This is in most cases due to the complexity of IT environment. Even when companies use advanced tools product development, the problem of changing the policy administration system yet. The World Class aims Operating Model time to market 1 day to 1 week after the change, including product approval marks and governance change.
State of the Art IT architecture and solutions
Starting World Class Operating Model to automate all sales, customer service, new business, renewal, runs, requirements , rating and policy change process based on robust loosely coupled, flexible IT architecture with best of breed system components integrated using Enterprise Service Bus and one central database. The state of the art IT architecture is scalable to deal with (fast) growth, is flexible, sustainable and prepared for all market development in the coming years.
Cultural participation and continuous improvement
process all today’s and are defined by the people ” we will not solve today problems with the same thinking that created them “(Albert Einstein). This means that the implementation of world class operating model is more than just an IT transformation. As Insurance is a very traditional industry where the risks reach the main objective, every transitional change will create resistance and when not managed well, will ruin the outcome of the transformation project. A World Class Operating Model implementation includes a culture change towards continuous improvement, stakeholders and staff participation and in most organizations the hardest nut to crack.
Simple and lean organization and governance
Apart from the technical and cultural challenges, planning and design are equally important to ensure a successful outcome of the World Class operating model transformation. Insurance organizations have many different representations caused by past and present management preferences, which are not necessarily the most efficient and effective structures. Usually this organization structures are causing more complexity, inefficiency and slow time to market. The World Class Operating Model includes a simple, straightforward and lean management structure and deliver optimal customer, partner and employee satisfaction.