How best practices in Testing are driving the current digital transformation in Insurance

Testing is the only way for you to understand if your company’s digital transformation is on its way to being successful or not. Needless to say, it is the most important phase in the software development life cycle.

If you are among the progressive insurance companies looking to revamp your core systems to deliver innovative products, your primary focus should be on creating and implementing a dynamic and robust quality assurance (QA) protocol. Adopting it proactively will enable you not only to manage the risks but also minimize the costs, which are some of the key issues that are bound to emerge during the transformation process. To start with, let’s have a quick glance at the ‘InsurTech’ adoption in India, followed by the overall impact of testing on the digitalization initiative.

The Indian insurance industry is expected to grow rapidly, owing to the solid economic growth and higher personal disposable incomes in the country.

According to data from the Insurance Regulatory and Development Authority of India (IRDAI), 25 general insurance companies recorded a 10.8% increase in their collective premium in January 2021 to Rs. 16,247.24 crore (US$ 2.24 billion) compared with Rs. 14,663.40 crore (US$ 2.02 billion) in January 2020.

Triggered by the ongoing pandemic and technology disruptions, the financial innovation in ‘InsurTech’ in India has opened up the space for new business models, applications, processes, and products. To keep pace with the changes, insurance companies are prioritizing digital transformation to improve and streamline customer acquisition and retention as well as optimize operations and client communication.

An Indian insurance company launched a chatbot to underwrite fire, burglary and two-wheeler insurance for SMEs. The company claims that the chatbot has sold more than 750 policies without any human intervention and engaged in more than 65,000 customer interactions. Similarly, another Indian health insurance company has deployed AI’s predictive algorithms, leveraging the past year’s claim activities and hospitalization data to offer wellness benefits that encourage customers to stay healthy.

As customer experience continues to drive digital transformation in the Insurance sector, QA and testing is the area that is at the forefront of the impact. With insurance companies looking to integrate their ecosystem to create on-demand digital products, it’s become imperative to invest in improving and standardizing the QA and testing processes. The investment will not help in reducing the time-to-market significantly but also in delivering flawless and world-class products that could potentially change the face of Insurance sector in India. On the other hand, the following are some of the major risks an insurance company could face by ignoring it.

One of the primary goals of Testing is to check if your systems and insurance applications meet your customer’s expectations before you launch them. As an insurance company, your efforts to transform your legacy applications and provide new business applications to your customers can hit a roadblock if they are not appropriately tested. For instance, the system could end up being too complex for end-users or might have too many flaws to ensure stable transactions. The other important parameters on which you need to check your business apps before the actual deployment include:

You need quality testing to avoid your customers getting impacted both in terms of the frequency of an error or the severity of the problem.

Impact by the frequency of an error means a recurring issue in your insurance software that occurs so frequently that it can leave your customers annoyed, but it won’t be too severe. For example, when you are trying to download the receipt of your insurance premium you paid online, but a frequent error preventing you to download it, is bound to leave you irritated.

On the other hand, an example of the impact of the severity could be a bug in your software that causes your data to become corrupted every thousandth time a file is saved. It would be a huge impact, but low on frequency. So, how do you go about it? The answer lies in the fundamental change in how you perceive testing and QA.

With a seismic shift in QA underway, it is important for insurance companies, especially in India, to keep pace with the factors driving it. It means, to ensure the accuracy and performance of your core systems, you need to stay on top of the trends and best practices being adopted in their industry. Here’s how you can stay abreast with some of the latest trends in testing:

While there are many testing tools in the market to make your life easy, identifying the right ones that complement your applications is the key. Testing solution providers with proven expertise in the insurance domain like NSEIT and others can help you build an actionable roadmap with recommended tools and strategies based on industry best practices and quality frameworks. Investing in specialized testing solutions would enable you to improve your efficiency, drive productivity and lower costs across all environments, devices, and channels, which would go a long way in ‘insuring’ the future of your company’s core systems and business applications.