TPAs have long enabled insurance companies to focus on their core business strategies and drive non-strategic blocks of business without compromising on customer service and financial objectives. However, new digital business models are forcing insurance companies to leverage Digital across their customer touchpoints, creating a huge data footprint. Information mined from this data can generate tremendous value to insurance companies, enabling them to improve their business strategies and create competitive differentiation.
While traditional TPAs currently exchange a huge amount of service data with insurance companies, they seldom use this data to exceed service delivery metrics or provide value-added services to their customers. Digital TPAs, however, focus this data exchange on delivering enhanced insights over and above the standard reporting of traditional TPAs—adapting to become a major contributor of value.
To this end, TPAs are driving the transition from simply providing a reporting function to delivering actionable insights and analytical models to benchmark and enhance their administration platforms for enhanced decision-making at the time of underwriting. They do this through:
- Developing data acquisition capabilities around key KPIs—as an important first step, Digital TPAs develop KPIs around call center, policy, claim, billing and payment data, and a robust KPI metric. More importantly, this complements the analytics that insurers create at their end, resulting in improved revenue management and accurate claims reserving.
- Simplifying data architecture to focus on data enrichment and availability—Digital TPAs enrich data assets during service transition, becoming a strategic value creation opportunity. Enriching and uncluttering existing data assets, and the easy accessibility and availability of this data, enables Digital TPAs to further unlock value.
- Blending data with an insurer’s analytic appliances—Digital TPAs ensure the integrity of data and a single version of truth across multiple touchpoints, through which data is delivered. It is important for TPAs to bring this consistency and integrity across the data they share with their clients and deliver consistent analytics.
- Backward linking of analytics to a TPA’s operating processes—Digital TPAs create cross linkage to improve KPI performance and deliver enhanced operational productivity through a strong analytic platform. This establishes a relationship between workflow processes and KPIs using granular process data.
- The integration layer—this collects the information from the interface component, determines what needs to be done and how to do it. Using such tools as robotics, automation, data feeds and web service calls, the integration layer performs the actions in the appropriate legacy platform, triggering other activities if needed, as well as providing a response back to the customer confirming their request has been received and is being processed. If the action can’t be done via the integration tools, a task or activity can be created in a workflow or business process management (BPM) tool for the appropriate person to perform the activity with the same level of customer engagement.
From the customer’s perspective, requests are carried out quickly and accurately, and they are able to communicate in their preferred channel. From the insurance company’s perspective, significant improvements are made to the experience, which has become faster and much less costly.
However, technical wrappers won’t solve all an insurer’s issues. For example, they won’t reduce heavy licensing and maintenance costs, or significant system or IT resource issues. But they can provide welcome relief while a conversion plan is created and the systems for conversion and their order of conversion are determined.
In summary, Digital TPAs offer a flexible approach to executing conversions, converting policy blocks three times faster and taking a technical wrapper-based approach to legacy administration platforms to drive efficiency. Digital TPAs also leverage a consulting approach to identify the most optimal solution that fits the characteristics of the insurance block under consideration.
Digital TPAs provide the universal customer interaction layer, the integration tools such as robotics, automation and web services, and the domain knowledge—both operationally and technical—that enable insurance companies to accelerate their digital journey and deliver an enhanced digital experience to their customers before, during and after transformation.