SAP Industries White Paper | Insurance

THE INTELLIGENT
ENTERPRISE FOR
THE INSURANCE
INDUSTRY

Creating contextual and personalized

experiences to meet the demands of
2025 and better serve customers today
SAP Industries White Paper | Insurance
© 2020 SAP SE or an SAP affiliate company. All rights reserved.
2
 WELCOME
Dear Customers, Insurers will use the explosion of data
from digital platforms to get closer to their
Radical change in the once-staid insurance
customers. They will be able to reward
industry is occurring at a rapid pace.
positive customer behavior, predict where
Disruption in technologies, in business
risk looms largest, and increase customer
models, in standards, and in the makeup of
engagement by providing services such as
“Insurers will use insurance companies themselves demands
loyalty programs that connect customers to
the explosion of constant adaptation. Driven by competition
an array of related services.
information to turn from new insurance and insurtech players,
data into insights rising consumer expectations, and emerg- We have identified three strategic priorities
ing technologies, insurers must respond critical to keeping insurance companies
and to get closer
to rapidly changing customer opinions and relevant:
to their customers
perceptions while still complying with all ▪ Digital engagement
in the experience standards and regulations. ▪ Protection services
economy. These ▪ Data-driven insights
companies will It is no small task, one that requires a fun-
damental reimagining of business models. To achieve the 2025 vision, insurers must
reimagine their
Insurers must meet the challenges from take advantage of the ever-growing amount
business models to competitors by adopting digital technologies of data generated by the Internet of Things
deliver new customer and an innovative approach that enables (IoT) to accurately track customer behavior
value across traditional rapid solution development and deployment and engagement. They can use artificial
industry lines.” based on measuring and understanding intelligence (AI) and machine learning to
customer sentiment. enable more-secure processes and
Toni Tomic transparency – supporting risk mitigation
Global Head of Insurance The global business economy is moving
for their policyholders. Blockchain can be
Business Solutions from industry-specific offerings to new
used to help insurers automate the settlement
digital network economies – alliances with
SAP SE of claims by leveraging business rules that
other companies, even competitors, to
are encoded into smart contracts. These
create complementary networks of
actions will provide an opportunity to
offerings and services. The effect is a
intelligently connect information and quickly
blurring of industry lines. This new network
deliver innovative products and services to
economy will grow to US$60 trillion by 2025
improve customer loyalty and satisfaction.
and coalesce around fewer ecosystems,
according to estimates from McKinsey & Leading insurance companies are already
Company. 1 Insurance companies are uniquely partnering with tech-focused newcomers to
positioned to participate in many of these leverage their technology and talent.
networks, as they touch life, health, property
This paper takes a deep dive into the trends
Watch the “Intelligent and wealth, housing, travel, and public
shaping our industry and the path to innovation.
Enterprise for the services, to name a few.
Insurance Industry” As industry after industry undergoes its
By 2025, we expect that many insurers
video. own digital transformation, a world of
will have transformed their businesses to
opportunities opens up for insurance
engage with cross-industry ecosystem
companies to become partners in their
providers. Instead of just managing risk,
customers’ lives. Those that do will cement
the industry will be focused on prediction and
their place for years to come with a new
prevention. A few leading insurers have
generation of consumers who live online.
already embarked on this journey.

Digitalization will ultimately be the

foundation on which insurers will build
new experience management strategies
to connect directly with customers and to
increase market share. The rise of smart Toni Tomic
digital platforms has transformed consumer Global Head of Insurance Business Solutions
expectations. These digital-first experiences SAP SE
point the way for insurance companies to
retake their place in their customers’ lives –
and to remain relevant and competitive.

SAP Industries White Paper | Insurance

© 2020 SAP SE or an SAP affiliate company. All rights reserved.
3
 TABLE OF
CONTENTS
3 Welcome

5 Our Place in the New World

7 Paving the Way for Business Model Innovation

8 Three Priorities for Success

9 Digital Engagement

11 Protection Services

13 Data-Driven Insights

15 Key Technologies

17 Getting There: A Phased Approach

18 Early Digital Adopters Lead the Way

19 SAP’s Framework for the Intelligent Enterprise

20 Comprehensive SAP Ecosystem Orchestrating

the Partner Ecosystem to Deliver Value Faster

21 SAP Is Committed to Innovation

22 Resources

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SAP Industries White Paper | Insurance

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4
 OUR PLACE
IN THE NEW
WORLD
Global “megathemes” are affecting the insurance
industry and provide new opportunities for growth.

▪ The need for trusted products requires insurers to members for their healthy living choices with
develop relevant and personalized policy offerings incentives and a unique loyalty program. Other
that relate to the specific needs of each customer. insurers, such as Generali, John Hancock, Ping
These must be delivered in a simple offering, such An Insurance Company, and Manulife, are using
as a “pay as you drive” model. Blockchain can the Vitality wellness concept in their markets.
provide the technology that can help increase
customer trust by enhancing transparency within ▪ The focus on integrated mobility requires
insurance processes. Insurance policies can be insurers to develop mobile solutions, apps, and
based on smart contracts that are secured with other innovative offerings to improve people’s
blockchain processes, introducing a degree of lives as well as organizational behavior by
automation that is missing in the traditional offering incentives for safer driving habits, for
insurance industry. These smart contracts example. Insurers are also exploring new business
provide predefined conflict-resolution strategies, models within the evolving ecosystems. Examples
which remove ambiguity and biased human include the Die Mobiliar’s CleverDrive telematics
interpretation. connected- car offer in Switzerland and the UPTO
monthly car-sharing subscription service
▪ The focus on health requires insurers to develop (sponsored by AXA). Insurance startups and the
solutions, mobile apps, and other innovative auto industry are also driving new business
offerings that meet the needs of a growing and models with insurance carriers in the area of the
aging population. For example, Discovery Ltd. has IoT. For instance, within the European Union, car
built the Vitality health program, which goes far manufacturers are teaming up to launch shared
beyond a traditional insurance program by services that track in-car data with third parties.
improving the customer experience through
lifestyle engagement. Vitality rewards its

Our Place in the New World

© 2020 SAP SE or an SAP affiliate company. All rights reserved.
5
The insurance
industry is being
reshaped by three Digital strategies are disruptive and
major trends. changing the rules of insurers.

Munich Re uses spatial data processing,

predictive analytics, and the simulation
▪ Insurers are managing risk The ability to address the global capabilities of the SAP HANA® platform
better by shifting from financial megathemes and the industry trends to assess risk in the moment. For
loss compensation to risk reduction will determine who will be the winners example, the company can identify
activities. in the next 10 years. In fact, research natural hazard profiles for millions of
indicates the best-performing companies locations around the globe in real time. By
▪ Digital is the new norm, with are pulling away from the rest, widening so doing, it can efficiently coordinate loss
adjusters after a major catastrophe or
technologies such as the IoT, the performance gap. They are doing
calculate how an impending hurricane or
machine learning, artificial this by creating a landscape where
flood may impact hospitals, schools, and
intelligence, blockchain, cloud they deliver great customer roads. Such real-time visibility enables
computing, and analytics impacting experiences and are the most Munich Re to take a preventive approach to
all end-to-end insurance processes, profitable because they successfully risk management – earning the company
including underwriting, claims, adopt new technologies and deliver top rankings in client surveys.
pricing, and delivery. winning products and services more
efficiently. Allianz Global Corporate & Specialty
▪ The playing field is changing, (AGCS) quickly rolled out a globally
consistent program to collect experience
with insurtech disruptors such as Forrester determined that 93% of
data from customers in 22 countries and
Trov Insurance Solutions LLC and cloud decision-makers believe it’s
16 languages. The company now has a
Lemonade Insurance Company important for the software for their wealth of insights. With the ability to easily
coming in as new industry entrants, business processes to integrate filter and prioritize those insights by
current customers, and partners. across an end-to-end value chain location and function, employees are able
in the cloud.2 to see exactly where to take action next.
In their words, they can “think globally
and act locally.”

70%
Of insurers are using cloud in their
business today; it is already an integral
part of their technology environment and
business platform.3

85%
Of firms will implement or plan to
implement IoT solutions.4

Our Place in the New World

© 2020 SAP SE or an SAP affiliate company. All rights reserved.
6
 PAVING THE
WAY FOR
BUSINESS
MODEL By 2020, 90%
INNOVATION
Of large enterprises will generate
revenue from data as a service ‒ from
the sale of raw data, derived metrics,
insights, and recommendations ‒ up
from nearly 50% in 20175

In 2025, insurers will deliver personalized solutions at scale and as a

service to their customers. Most of the insurance companies’ revenue
9%
will come from services that are delivered around and based on highly Of companies have access to real-time
customized, digitalized products that support cross-industry ecosystem data for financial analysis and planning6
requirements.

These services will span from simple cross-sell and up-sell services to
complex underwriting risk models. Services will also include new 56%
business models based on the monetization of data assets. Increasingly, Of CEOs are concerned about the data
insurers will be able to more effectively use their data assets that are they are basing decisions on7
already generating revenue based on the business they conduct.

Satellite data will enable insurers to gain insights and predict potential
impacts from natural disaster data, helping them keep costs down for
US$10.84
their clients and also make the world a safer place. billion
Is the estimated size of the carsharing
Insurers will need to redefine their core competencies in light of new market by 20258
digital network economies and rebuild their business strategies around
them. For example, they will need to partner with other industries and
develop relevant products and services, such as home insurance and
security system bundles. They will need to take advantage of digitalization 72%
to integrate and optimize their products and services to improve the Of financial institutions list “redesign
customer experience. For instance, they could deliver point-of-purchase or enhance the digital experience for
insurance coverage with a mobile app, covering ski equipment and the consumer” as their top strategic
personal injury protection for skiers at a resort. priority9

69%
Identifying the key drivers of customer behavior to help improve
policyholder acquisition and reduce churn will be critical to success.
Gathering feedback across broker and customer journeys to better
Of customers who plan to leave say it
understand behavior and take action will help insurers develop their was due to poor service10
road map for future growth.

Embracing the opportunities from new technologies successfully and,

consequently, implementing the right business initiatives will be the
foundation of successful digitalization transformation and staying ahead
of the innovation curve.

Paving the Way for Business Model Innovation

© 2020 SAP SE or an SAP affiliate company. All rights reserved.
7
 THREE
PRIORITIES
FOR SUCCESS
We have identified three strategic priorities
necessary for insurance companies to
transform their business:

▪ Digital engagement
▪ Protection services
▪ Data-driven insights

Three Priorities for Success

© 2020 SAP SE or an SAP affiliate company. All rights reserved.
8
 DIGITAL ENGAGEMENT

The creation of consistent, loyalty-building experiences in a

multichannel environment is essential to meeting the expectations
of customers in today’s digital world.
Insurers will analyze each customer’s behavior and their customers’ lives. As an example, by accompanying
point of view to succeed in the digital age. They will all financial flows, the insurer will be able to provide
use connected people, devices, and external data a real-time view of personal finance, which helps
sources to build an effective engagement model. customers better manage their finances and leads
They will drive organizational alignment to create to improved customer satisfaction. (See Figure 1.)
best-in-class experiences at every touch point
including enrollment, policy renewal, claims The Journey
processing, and more. Real-time simulation and Insurers will start toward this goal by evolving
analysis will be leveraged to evaluate the financial the current routes to the customer into a true
implications of strategic business choices. omnichannel model. They will extend the customer
record to include a real-time view of the policies in
The Vision place, with an evaluation of coverage suitability.
In 2025, insurers will be able to maintain customer-
“ Using Big Data combined with analytical capabilities,
for-life relationships with a shared risk and a focus they will provide customers with real-time financial
on long-term value. This will be based on a 360- information and offer recommendations for
degree view of their customers across industry improving their financial status. Lastly, they
ecosystems and on a detailed understanding of will collaborate with customers in a 360-degree
requirements and needs. Insurers will interact with manner, from sensing demand to delivering value
their customers on a continuous basis through through new products and services. The beneficial
multiple channels, from Web to direct sales, results will include increases in customer loyalty,
including IoT connectivity. With the customer as new customer acquisition, and customer satisfaction.
the center point of focus, insurers will help improve

Figure 1: The Vision of Digital Engagement

Today Future

Transactional Holistic 360-degree view of the customer for life

63% of consumers are willing to pay up to 15% more for a better customer experience.11

Positiva’s system (for business intelligence) enabled them to simplify and speed up client service tasks, from enrollment
and claim recognition to issuing benefit payments, to make them more effective. Data complexity and the millions of
records in company databases have been efficiently managed thanks to the organizational application of the latest
technology. This has placed Positiva at the forefront of the digital revolution in both the public and the private sectors.

Three Priorities for Success

© 2020 SAP SE or an SAP affiliate company. All rights reserved.
9
DIGITAL ENGAGEMENT
Reimagine Digital Engagement with
New-Generation Claims Processing
Insurers want to offer a seamless customer experience across all channels, including self-service portals. They will communicate
with people and devices and connect to external data sources to build more-efficient interaction models. Digital engagement
enables insurers to bring relevant products to market quickly, products that reflect both actuary knowledge and real-world
insights. Insurers will incorporate new insights into the management of policies, commissions, claims, and reinsurance to run
their operations more effectively. And they will use simulations and analysis to evaluate the financial implications of their
strategic business choices.

TRADITIONAL SCENARIO
Update reserves manually.

Trigger initial
reserving process
manually.

Receive the injured Process the claim Initiate repairs. Source and negotiate Complete repair, Receive the
person’s call at the and initiate follow- with repair shop invoice the appropriate client’s
call center. up processes. providers. party, and issue confirmation of
payment to the service the repair or
provider. service
settlement.

NEW-WORLD SCENARIO
Set initial reserve Update reserves automatically with the
automatically. help of machine learning. Update reserves
based on payments.

Initiate the Share the claims status with the Match electronic Receive the client’s
Detect the first
repair with policyholder through a modern invoices and initiate confirmation of
anomaly or
Ariba® Network. user experience (UX) enabled by the payments. service settlement.
notice of loss
SAP Fiori® UX. Capture “in the moment” Analyze claims
through sensors.
customer feedback and manage any spend data with
issues on a real-time basis. SAP® Digital
Boardroom.

TOP VALUE DRIVERS

Increased productivity Higher customer satisfaction Fewer processing errors

Companies that use analytics to implement targeted interventions for emotionally engaging customers can realize 50% higher revenue,
34% higher profitability, and 55% higher share of wallet.12

Source: SAP Performance Benchmarking

Three Priorities for Success

© 2020 SAP SE or an SAP affiliate company. All rights reserved.
10
 PROTECTION SERVICES

Customer expectations are moving in the direction that

a potential loss should be prevented before it occurs by means of a
protection service.
Insurers will align their internal and external The Journey
workforce to be able to provide products and Insurers will start toward this goal by engaging with
services that go beyond traditional insurance customers to design existing protection policy
products. Proactive fraud prevention capabilities options and variations using a simple configuration
will be embedded into relevant processes to modeling tool. They will then extend existing policy
mitigate risk exposure. models by adding customer requirements to clearly
tie customer needs to specific options and features.
The Vision Finally, they will let customers interact with these
In 2025, most insurance companies will be able policy models through multiple channels and define
to exchange beneficial information on services, their own product on the fly based on proven and
behavior, and risk. By so doing, they will be able to underwriter-approved configuration options.
improve customer relationships and interactions. Throughout this process, insurers will get real-time
Insurers will deliver hybrid products by bundling insights on key experience drivers to fuel future
insurance coverages across lines of business improvements by capturing and automatically
with noninsurance products and services to offer analyzing experience and operational data sets.
protection services. For example, home security
products will be included with the delivery of a
homeowner’s insurance policy. (See Figure 2.)

Figure 2: The Vision of Protection Services

Today Future

Segmentation Single customer

46% of bundle customers say they “definitely will” renew with their provider, versus 28% of nonbundle policyholders. 13

Meteo Protect provides fully customized weather insurance with the SAP HANA platform, using the platform to aggregate
weather-related data, analyze risks and price, and underwrite the policy – all in real time. This new type of insurance
meets the needs of farmers and others affected by climate change and adverse weather conditions. Watch the video

Three Priorities for Success

© 2020 SAP SE or an SAP affiliate company. All rights reserved.
11
PROTECTION SERVICES
Reimagine Protection Services with
the Connected Home
Bundling insurance coverages across lines of business with noninsurance products and services will offer protection services that are
essential for an insurer’s success. Insurers can create new product offerings based on a customer’s usage of IoT sensors and devices and
offer telematics data to policyholders with recommendations for safer behavior. By doing so, they will strengthen customer relationships by
exchanging beneficial information on services, behavior, and risk changes. They can initiate responsive reactions to events, such as emergency
services for accidents and police for home intrusion. Protection services will include the deployment of proactive fraud prevention capabilities
and the use of blockchain to enable more secure transactions and processes.

TRADITIONAL SCENARIO

Paper-based homeowner When a loss event occurs, An adjuster is assigned and will The claims closure is delayed due to
(HO) insurance policy is such as a water leak, no early evaluate the damages. The HO inefficient process steps, resulting
mailed to the new HO detection and remediation must engage a service provider in a higher claims loss ratio.
without any interaction or options are available. The HO directly to initiate Customer satisfaction is impaired
additional support options. must first file a claim over the the repairs. by the stressful claim process, and
phone or online, which delays chum is likely.
the process.

NEW-WORLD SCENARIO

With the purchase of a new HO receives an alert about Insurer assigns emergency The up-sell opportunity for Analytics data reveals a
home, insurer sends the a water leak in the base- repair service from Ariba the insurer to offer a reduction in claim closure
homeowner a smartphone ment with the option to turn Network; selects service premium assistance time, an improvement in
insurance package that off the water supply. based on best performance package enables the HO to loss ratio reserve, and an
includes installation of a Smartphone app provides and contract price; and reduce deductibles moving increase in customer
security system and the option to report a claim, measures the quality, forward. satisfaction and retention.
sensors for smoke and with information automatically speed, and cost of repair Insurers can now capture “in
water leaks. stored (loss location, HO shops to provide continuous the moment” customer
policy, and so on.) assessment for updates to feedback to better
the “Best Providers” list. understand customer
emotions and sentiment.

TOP VALUE DRIVERS

Higher customer satisfaction Lower customer service costs Opportunity to cross-sell and up-sell

Life insurers are using social network and geographical data to reduce fraud by up to 25%.14

Source: SAP Performance Benchmarking

Three Priorities for Success

© 2020 SAP SE or an SAP affiliate company. All rights reserved.
12
 DATA-DRIVEN INSIGHTS

Meeting customer-specific expectations requires a single, data-

driven view of customers, products, quotes, and policies that will
provide a holistic digital experience.

Insurers will anticipate customer behavior, such as The Journey

policy cancellations or renewals, with instant insight Insurers will start toward this goal by designing
from transactional data and digital interaction product offerings based on the insights from the
points. A real-time finance and risk data platform data of IoT applications and related insurance
will effectively manage risk, protect investments, services. They will extend the use of sensors and
and enable compliance with accounting regulations. telematics to develop holistic umbrella coverage for
all aspects of insurance. They will partner across
The Vision various industries, such as automotive, banking,
In 2025, insurance companies will be able to public sector, and professional services, to
consistently analyze customer data about behavior automatically integrate everything that impacts the
and points of view so they can deliver innovative policyholder, such as warranties, wire transfers,
products and services to market quickly while government regulations, and service providers.
maintaining them more efficiently. Insurers will use
the key insights provided by IoT applications and The constant and fluid analysis of experience and
related insurance services to drive what products operational data will provide a holistic understanding
are created and what services are offered, when of human experiences. Insurers can more quickly,
and where. (See Figure 3.) or even preemptively, understand and adjust their
strategies to drive immediate top-line or bottom-
line impact.

Figure 3: The Vision of Data-Driven Insights

Today Future

Individual data points Real-time, multisourced,

digital interaction data

Over the next five years, IoT car safety technology will save insurance companies US$45 billion in the United
States alone.15

elseco enables an intelligent approach to underwriting specialty risks such as aerospace insurance. They integrated
their Big Data with CRM systems to personalize offers so that they are now able to give real-time information to
underwriters before the underwriting process begins.

Three Priorities for Success

© 2020 SAP SE or an SAP affiliate company. All rights reserved.
13
DATA-DRIVEN INSIGHTS
Reimagine Data-Driven Insights with
Product Lifecycle and Process
Insurers will use machine learning data to evaluate all available unstructured, relevant sources of information about policy
applicants. Underwriters can use machine learning to manage complex risk assessments and product pricing, and to determine
the most efficient employee follow-up actions based on historical data processing. This will enable them to suggest the best
cross-industry products for the customer based on their profile and needs. Data-driven analytics will be used to track the status
of claims processing and overall claims management performance, while predictive analytics will be used to determine the best
claims reserve amounts.

TRADITIONAL SCENARIO

Products are predefined and It is difficult to automate It is difficult to tailor marketing Any incoming customer
standardized by product customer interaction. activities to address specific interaction cannot be
management. customer needs. transferred to other insurance
lines of business.

NEW-WORLD SCENARIO

Customer requests Insurer checks on already Insurer uses up-selling Triggered by the address Insurer achieves higher
address change existing products and opportunity of an electronic change, the homeowner customer satisfaction by
using chatbot, services and updates driving coach assistant to policy will be transferred offering personalized
them automatically, encourage safer driving automatically to the new services and by delivering
behavior based on the address. products quickly at an
customer’s auto history. acceptable price.

TOP VALUE DRIVERS

Faster time to market Lower R&D costs Higher revenue from new products

Companies are using data on insurance agents to predict how likely each one is to sell multiple products, leading to a 20% to 25% increase
in sales.16

Source: SAP Performance Benchmarking

Three Priorities for Success

© 2020 SAP SE or an SAP affiliate company. All rights reserved.
14
 KEY
TECHNOLOGIES
The current pace of technological
advancements has the most profound
impact on enabling how insurers transform
themselves to respond to their customers’
needs and to market trends.

Intelligent technologies promise to bring great The Internet of Things

benefits such as productivity and efficiency gains, Advances in ubiquitous connectivity and edge
enabling innovative new business models and computing are driving a step change in business
new revenue streams. The following intelligent productivity. This connectivity, coupled with
technologies are instrumental in helping insurance artificial intelligence and machine learning,
companies respond to market trends. can analyze petabytes of data and affect real
business outcomes. Although insurers have been
Artificial Intelligence and Machine Learning using the IoT for some time, now the entire value
Machine learning enables algorithms to “learn” from chain can be connected. Data-driven insights of
existing data and achieve the best possible outcomes customer preferences can drive better products
without being explicitly programmed. Once the and services that lower cost and reduce risk. For
algorithm is trained, it can then predict future instance, with a connected car, services might
outcomes based on new data. Insurers can leverage include parking or roadside assistance. For a
these capabilities to eliminate repetitive manual tasks connected home, the service could be real-time
associated with simple claims processing by responses to sensor-detected issues, such as
automatically determining classifications, routing, and automatically dispatching a plumber to the house
responses, or by helping with complex solution in the event of a water leak.
configurations by applying machine learning to
historical data to streamline the quotation process for
configurable policy management products.

Part of the Farmers Insurance Group of Companies, Foremost Insurance Group wanted to make its portal so simple that
independent agents would need no additional training. With Experience Management solutions from SAP, Foremost now
gathers quantitative feedback from 1,000 agents to guide the redesign of its Web site. What’s more, the company’s
executive team can now receive quantifiable reports in hours instead of days.

Key Technologies
© 2020 SAP SE or an SAP affiliate company. All rights reserved.
15
Advanced Analytics simulations, was once the stuff of
The integration of advanced science fiction. So was augmented
analytics capabilities, including reality (AR), which lets users interact
situational awareness, into with digital content that’s overlaid on
applications enables business users the real world. Already in use to help
to analyze customer data on the fly
and drives better decision-making.
workers with difficult or infrequent
administrative activities, this will
US$6.2 trillion
Is the estimated global worth of IoT
Empowered users can get real-time become even more critical to attract
technology by 202517
visibility into their operations, and retain millennials.
customer feedback, and changing
environment. They can simulate the
impact of business decisions,
Conversational AI
Advances in machine learning are >50 billion
mitigate risk, and achieve better enabling algorithms to become Is the estimated number of connected
outcomes. highly accurate in natural-language devices by 202518
understanding and in image and
Blockchain speech recognition, especially useful
One of the most significant benefits
of blockchain is its potential for
in customer service call-center
activities. Voice interface will be the
40%
Of digital transformation initiatives will
helping the insurance industry move go-to technology for the next use AI services by the end of 201919
transactions and contracts through generation of applications, allowing
multiple parties in a way that is not for greater simplicity, mobility, and
only secure but also transparent and efficiency while increasing worker Swiss Re merged all of its customer
accountable to its users. Through its productivity and reducing the need experience, voice-of-the customer,
and market research data from more
use as a public ledger, blockchain for training. Smart chatbots will also
than 11,000 clients, 25 markets, and
potentially can eliminate suspicious help insurers deliver up-sell and 11 languages onto a single, secure
and duplicate transactions, limiting cross-sell opportunities. It is SAP Qualtrics® Core XM platform.
fraudulent claims. As higher levels of imperative to continually measure The results were:
trust are established between customer feedback and sentiment to ▪ 90% decrease in research costs
▪ 7-point increase in Net Promoter
insurers and the insured, claims evaluate the effectiveness of all Score
management can be handled more automated voice interfaces, which ▪ 5 times faster research speed
efficiently. Reinsurance contracts will enable iterative process
can become more transparent, and improvements.
capital can be moved more
efficiently. Even complex compliance
issues within the industry can be
Robotic Process Automation 81%
Robotic process automation Of consumers are willing to pay for a
addressed more effectively. streamlines repetitive, rule-based better experience20
processes and tasks in an enterprise
Virtual and Augmented Reality and reduces cost through the use of
Virtual reality (VR), the use of digital
technology to create immersive
software robots by replicating
specific tasks or keystrokes.
92%
Of U.S. adults said they would switch
to another company after three (or
fewer) negative customer service
experiences21

Key Technologies
© 2020 SAP SE or an SAP affiliate company. All rights reserved.
16
 GETTING THERE:
A PHASED APPROACH
Companies will become intelligent enterprises on three distinct tracks as
they evolve their strategic priorities to match their company’s vision.
They will:

▪ Optimize what they already do by implementing a stable and scalable

digital core to make processes more transparent and integrated

▪ Extend their current processes by connecting them to the real world

using IoT technologies

▪ Transform their business using a constant stream of data, enabling

new service-driven business models (See Figure 4.)

Figure 4: Strategic Priorities Across Lines of Business

Operational Total Spend Responsive

Customer Centricity Finance and Risk
Excellence Management Workforce

Collaborative Policy Collaborative Customer account Customer

interactions configuration supplier network management interaction

Digital Today Future Today Future Today Future Today Future Today Future
Engagement Siloed Integrated Static rules Rules Siloed Integrated, Siloed risk Integrated Disparate Enabled
customer channel powered by supplier strategic, and and profit financial customer workforce
channel process with machine network agile global data model with information with real-
process customers learning supplier sources drill-down time data for
network capabilities policyholders

Behavior and
Insurance coverage Network security Financial models Insurance services
risk models

Protection Today Future Today Future Today Future Today Future Today Future
Services Delayed, Embedded IoT Single policy Hybrid Multiple End-to-end Difficulty in Advanced Discon- Connected,
manual data sensor data product products by security encryption for forecasting simulations nected real-time
processes processes offerings bundling solutions secure and modeling that enable systems that response
coverages and procurement scenarios flexible what- result in capabilities
processes if scenarios delayed using the
responses to IoT and
customer telematics
needs

Regulations and
Customer loyalty Solution selling Claims management Employee decisions
auditing

Data- Today Future Today Future Today Future Today Future Today Future
Driven Focus on Focus on Sales of Sales of data Manual, Fully integrated Manual Regulatory Multiple one- Use of
Insights product lifetime products only and services discon- process using financial and off decisions machine
customer nected machine oversight compliance based learning to
value processes learning and processes reporting with on gut determine
analytics to real-time feelings the most
improve spend auditability efficient
customer
follow-up

Getting There
© 2020 SAP SE or an SAP affiliate company. All rights reserved.
17
 EARLY DIGITAL
ADOPTERS
LEAD THE WAY

How do you achieve these strategic priorities?

Start with reimagining your business together with your customers.

Then build a path for even more optimization and intelligent automation to simplify your
business and free up resources to invest in even more digital transformation programs
and find new business models and revenue streams.

According to a July 2018 study by Forrester Consulting that was commissioned by SAP,
innovative companies focus on digital priorities to help them achieve digital
transformation more than other insurance companies. (See Figure 5.)

Figure 5: Adopting the following intelligent technologies will help innovative insurers and other
financial services firms achieve their digital transformation goals.22

Innovators 95%
Big Data and
real-time
analytics Others 78%

Innovators 88%
Internet of
Things 56%
Others

Innovators 89%
Blockchain
Others 59%

Innovators 93%
Machine
learning
Others 55%

Getting There
© 2020 SAP SE or an SAP affiliate company. All rights reserved.
18
 SAP’S FRAMEWORK
FOR THE INTELLIGENT
ENTERPRISE
Most organizations understand what is happening in their business, but they may not always know
why.

They know what’s happening because they have systems that capture operational data – about
their customer transactions, supply chain, manufacturing, spending, and the activities of their
workforce. They can see that data through reports and dashboards. They can see trends and
predict what will happen next.

But to influence what happens next, companies need data about the interactions that people have
with their products and their business. Experience data captures beliefs, emotions, opinions, and
perceptions – the “why” something is happening. And when companies know why something is
happening, they can make an informed decision about the best way to respond.

To win in this experience economy, intelligent enterprises connect experiences with operations.
Y
They use both O-data and X-data to guide their business decisions. Intelligent enterprises collect
insights from customers, employees, products, and brands at every touch point. They use powerful
technologies to automate and integrate their data, processes, and applications, enabling them to
sense risks, trends, and opportunities.
And they act on this intelligence across every part of their business (see Figure 6).

Only SAP has the strategy, expertise, and solutions to deliver on this vision, enabling intelligent
enterprises to turn insight into action.

Figure 6: SAP Intelligent Enterprise Framework

X HR
Data Customer Finance

Customer Analytics Intelligent

Technologies
Manufacturing

Experience Intelligence Operations

Employee
Supply Chain
Database & Application Development
Data Management & Integration

Product Procurement
Brand O
Data

Getting There
© 2020 SAP SE or an SAP affiliate company. All rights reserved.
19
 COMPREHENSIVE
SAP ECOSYSTEM
ORCHESTRATING
THE PARTNER ECOSYSTEM
TO DELIVER VALUE FASTER
Our comprehensive ecosystem for the Insurance industry offers:
▪ The Intelligent Enterprise as the overarching ▪ Integration into a wide range of business
strategy to meet future requirements, providing: services (OEMs, suppliers, key vendors,
and more)
– SAP S/4HANA co-development
programs for customers and partners ▪ Open architecture, with a choice of hardware
and software specifically designed to meet
– Industry co-innovation programs for
requirements
industry-specific use cases
▪ Complementary and innovative third-party
– Delivery of enterprise-to-enterprise industry
solutions to provide leading-edge and state-
clouds
of-the-art technology
– Thought leadership, evangelism, and
enablement by industry through events,
councils, and regular customer exchange

Our partner ecosystem includes, among others:

Getting There
© 2020 SAP SE or an SAP affiliate company. All rights reserved.
20
 SAP IS COMMITTED
TO INNOVATION

10-Year Innovation Vision Comprehensive Industry Proven Services Offering

SAP delivers fully intelligent Coverage By bringing together world-
business solutions and networks SAP enables comprehensive class innovators, industry
that span company boundaries and coverage of the complete and emerging technology
promote purpose-driven insurance value chain across expertise, proven use cases,
businesses. These solutions will be the enterprise. With its clear and design thinking
the most empathic symbiosis industry road map, SAP is the methods, we help insurers
between machine intelligence and partner of choice for the develop innovations that
human ingenuity. insurance industry. deliver impact at scale.

▪ Self-running enterprise ▪ More than 5,600 insurance ▪ Proven methodologies

systems companies in 107 countries to drive innovation,
▪ Self-organizing business innovating with SAP solutions from reimagining
ecosystems ▪ All of the 25 top global customer experiences
▪ New markets and insurers in the world running to enhancing operations
business models SAP solutions ▪ Innovation that is fueled
▪ All of the 15 most-admired through a managed
property and casualty innovation ecosystem
insurance companies from SAP
in the world running ▪ Ability to build your own
SAP solutions innovation capability and
culture

SAP supports insurance companies in becoming intelligent

enterprises – providing integrated business applications that use
intelligent technologies and can be extended on SAP Cloud
Platform to deliver breakthrough business value.

Learn more

▪ SAP for Insurance

▪ SAP Services and Support

Getting There
© 2020 SAP SE or an SAP affiliate company. All rights reserved.
21
 RESOURCES

Outlined below is external research that was used as supporting material for this paper.

1. “Phoenix Rising: Remaking the Bank for an 13. “88% of Insurance Consumers Demand
Ecosystem World,” McKinsey & Company, More Personalization from Providers,” V12,
October 2017. August 2018.
2. “Emerging Opportunities to Deploy Industry 14. “Digital Disruption in Insurance: Cutting Through
Processes in the Cloud,” a Forrester Consulting the Noise,” McKinsey & Company, March 2017.
thought leadership paper commissioned by SAP,
15. “99 Facts on The Future of Business in the
July 2018.
Digital Economy,” Fast Facts, SAP, 2017.
3. “2019 Insurance Outlook,” Deloitte, 2018.
16. “Digital Disruption in Insurance: Cutting
Source cited in Deloitte paper: “Cloud Adoption
Through the Noise,” McKinsey & Company,
in Insurance: Trends and Issues,” Novarica,
March 2017.
March 2018.
17. “A Guide to the Internet of Things,” Intel.
4. “Predictions 2019: Transformation Goes
Pragmatic,” Forrester Research Inc., 18. “Digital Ecosystems for Insurers: Opportunities
November 2018. Through the Internet of Things,” McKinsey &
Company, February 2019.
5. “IDC FutureScape: Worldwide IT Industry
2018 Predictions,” IDC, Doc. #US43171317, 19. “IDC FutureScape: Worldwide IT Industry
October 2017. 2018 Predictions,” IDC, Doc. #US43171317,
October 2017.
6. “99 Facts on The Future of Business in the Digital
Economy,” Fast Facts, SAP, 2017. 20. “The Disconnected Customer: What Digital
Customer Experience Leaders Teach Us About
7. “Disrupt and Grow: 2017 Global CEO Outlook,”
Reconnecting with Customers,” Capgemini, 2017.
KPMG, 2017.
21. “Customer Service Expectations Survey,"
8. “Carsharing Market to Reach $10,846.9 Million
Gladly, 2018.
by 2025: P&S Intelligence,” Prescient & Strategic
(P&S) Intelligence, published on GlobeNewswire, 22. “Emerging Opportunities to Deploy Industry
March 2019. Processes in the Cloud,” a Forrester Consulting
thought leadership paper commissioned by SAP,
9. "Experience Management," Qualtrics, 2018.
July 2018.
10. “The Banking Customer Experience Report,”
Qualtrics, 2018.
Note: All sources cited as “SAP” or “SAP
11. “2017 State of Online Reviews,” Podium, 2017. Performance Benchmarking” are based on
our research with customers through our
12. “AI Is Threatening Customer Experiences. Are
benchmarking program and other direct
You Ready?,” Gallop Workplace, January 7, 2019.
interactions with customers.

Resources
© 2020 SAP SE or an SAP affiliate company. All rights reserved.
22
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