Digital Investments That Drive Carrier ROI

For those that have been in P&C insurance for 20+ years, you know the core system investment cycle. Every 10-12 years a shiny new PAS system replacement project takes place. Based on what has been seen in the market, 2021 was the end of the last big cycle. This wind-down seemed to start in 2020 as is illustrated by investment priorities shown in Commercial Line priorities outlined by AiteNovarica1. There was a sudden focus shift to distribution and underwriting. Was this driven by COVID? Maybe, but executives are tired of spending tens of millions of dollars on insurance technology that doesn’t impact the top line.

Reputable and knowledgeable companies like McKinsey echoes Novarica and P&C executives in saying:

“By 2030, significant technology investments will have paid off, and manual pricing and underwriting will cease to exist for most personal and small commercial products across life and P&C insurance.2”

This is news is not new to market-savvy carriers. However, the challenge has been in “what” and “how” to invest digitally. It is even more challenging in the insurance vertical where people are experts in managing risk. Getting management to invest in anything outside of traditional core operations can be like “moving mountains”. This is especially true for commercial P&C carriers with more traditional cultures. 

The first investments started ten years ago with the introduction of carrier portals. Larger, capital-rich carriers were able to take advantage of this benefit first. Networked insurance agents had fewer options so adoption was easier to gain. Now, given the current market in 2022, with the evolution of InsurTech solutions and non-traditional entrants – digital investments have been redefined. 

Now, having the proper digital investments implemented initially will lead to less capital being required to enter the insurance market. Attempts to disintermediate independent agents have largely failed because carrier portals have increased in size from hundreds to hundreds of thousands. Yet with 82% of insurers having a portal or mobile app and 87% investing in channel capability enhancements only 32% feel their investments are effective in sales because they “lack personalized advice capabilities.”3 

So, what investments should a carrier make to drive real ROI? Artificial intelligence? Digital advisors (bots)? All these options have merit yet fail to address the fundamental challenge facing the market today. There is a general lack of maturity in API’s both in number and granularity (i.e. rate, quote, bind micro-services). Digital demand is pent up through InsurTechs like Appulate but can’t be consumed unless carriers open their systems to accept it. AI and software robots can’t fix this, but automated commercial insurance software can.    

Contrary to popular belief, you can start small and scale incrementally. Below is a solid risk and capital-managed plan. The step which you will start with depends on your current level of maturity. Each step drives a return that can fund advancement to the next step.

  1. Digitize submissions from multiple channels. There are too many agent portals and agents are overwhelmed. Accepting digital insurance submissions through markets and larger distribution partners can open the door to premium growth. Comparative raters can bring traffic but have mixed results for bind and renewals for many reasons. This also requires an API for accepting applications and supplemental forms. But that doesn’t mean you have to boil the ocean with your PAS system. Even if the API stores data that can be uploaded via batch to legacy PAS systems it’s better to digitize insurance submissions through companies like Appulate than go through a manual process.
  2. Enhanced API / Portal integration. Enable electronic submissions through advanced APIs directly to your back-end PAS system or your front-end portal using AMS integration tools. Doing so improves turnaround time through better AMS integration, as seen with Appulate carrier partners. 
  3. Optimize submissions to reduce waste. Codify appetite criteria and basic underwriting needs. Then, screen out unwanted and incomplete applications to reduce underwiring overhead and waste.
  4. Transform organizational and API infrastructure. Review your growth strategy and update the appointment infrastructure, products, and channel relationships. Next, simplify underwriting guidelines where possible and look for opportunities to automate underwriting. Do this before you spend time and money on a new underwriting system. Multiple case studies show that simplification with minimal additional risk has driven significant cost reduction and reduced turnaround time.
  5. Advanced Process Orchestration. Build API micro-services for rate, quote, bind, and appointment. This allows simplified processing for simpler lines of business. Appulate utilizes these implementations to speed turnaround time for complex lines where underwriter intervention is required.                  
  6. Invest in awareness, adoption, and utilization of digital services. Like any investment, digitization requires active workforce management. Invest in digital optimization and low-cost / high-value insurance submission channels to best achieve the awareness, adoption, and utilization results you seek.

Successful carriers rely on companies like Appulate who present a complete automation strategy that reduces cost while offering the distribution and insurance technology solutions duo that drives the highest ROI. Appulate marries best-in-class insurance submission and quoting automation with the largest network of independent agents to produce over $1B in annual premium for carriers. Appulate’s access to 300K independent agents equates to $ 3.6 billion in digital insurance submissions right at your fingertips.

To learn more about how Appulate can increase carrier ROI, visit us at:

  1. AiteNovarica (July, 2021). Business and Technology Trends: Commercial Lines.
  2. McKinsey & Company (October, 2020). Insurance productivity 2030: Reimagining the insurer for the future.
  3.  Capgemini (2021). World Insurance Report 2021.