By Abishek Bhat on Mar 3, 2020 8:12:57 AM
In a world where technology is creating on-demand and bespoke experiences, the insurance industry is ready for disruption. Characterized until now by lengthy and manual processes and limited offerings, the industry has been quick to burst out of its protective bubble by leveraging new-age technologies including Blockchain, Artificial Intelligence (AI), extended reality, and quantum computing.
Key to accelerating this technology disruption is the InsurTech sector seen collaborating with insurance companies to facilitate nimbly and point solutions across the entire value chain. PwC Australia’s Global InsurTech report projects that the number of insurance providers partnering with InsurTechs will reach 84% between 2020 and 2022.
However, in the race to transform their platforms and products, insurance companies—and their InsurTech partners—are facing several challenges. Primary among them are software and application testing challenges.
Insurers and InsurTechs experience different ‘testing’ difficulties
Digital self-service claims platforms, apps that reward policyholders based on their lifestyle and driving behaviors, and even wearables that monitor diabetes and reward condition management, are some of the trending innovations created by InsurTechs. The companies behind these innovations mostly characterize themselves as digital economies. They evolve faster, are more embracing of Agile & DevOps, and have built products from the ground up are usually less complicated from the product stack that they manage. So when it comes to testing, their primary need is speed. To get to the market first, they need to identify failures, test, and evaluate faster than their competitors.
Furthermore, InsureTech players see themselves primarily as product/platform developers. This requires them to customize and dovetail their product into other complex systems. Testing, therefore, will have to extend beyond their primary product stack and include integration as well.
Insurance companies, on the other hand, have a completely different set of testing needs. Equipped with a substantial customer base, but challenged with changing customer needs, they are transforming to meet the digital, omnichannel, tailored offerings that can enrich the customer journey and experience. This leads them to integrate newer systems into their existing technology stack.
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Testing needs will then have to be heavily focused on end-to-end validations to ensure that customer experiences are not compromised. Additionally, testing will also have to ensure that integration with complex legacy applications is maintained. At the same time, the performance and security of valuable customer data is not compromised when supporting their large customer bases.
Test automation—an essential tool in accelerating disruption
Test automation solves several of the above challenges. According to the World Quality Report 2019-2020, which surveyed 1725 CIOs and senior tech leaders, the main benefits reported were better control and transparency of test activities and detection of defects. The respondents also attributed test automation to gaining reduced test costs, test cycle time, and security risk.
For InsurTechs, like any other product innovator, deploying test automation fulfills an essential requirement—it assures improved coverage of their checks, ensuring faster release schedules. More importantly, test automation serves as a strong foundation during the integration of their product with larger insurance players. The features of a full-stack test automation framework, such as cross-technology and cross-platform readiness, and library customization, ensures that the marriage of services play with product play is effectively implemented.
Insurance companies leveraging test automation have experienced quantifiable benefits. A leading benefits administration and general insurance agency leveraged test automation software and reduced regression testing time by 85%. The process which covered 95% of the test coverage area led to a 45% reduced time-to-market rate.
Test automation also plays a vital role in their transformation journey. For instance, when insurance companies are integrating new technologies, it simultaneously increases the testing workload. Vendors who manage their test outsourcing contracts are more interested in maintaining their SLAs and thus are slower in the uptake of the new changes. Test automation, essential to conduct acceptance tests is then best addressed through outside, neutral parties.
The PwC Insurance 2020 report states that disruption is the new reality in the global insurance industry requiring industry players to keep pace with the sweeping social, technological, environmental, economic, and political developments that are categorizing this change. Implementing early test automation, at this juncture, will then work as the key differentiator for insurance companies and InsurTechs seeking to gain a head start in the digital ecosystems of the future.