The insurance industry has one pretty unique feature: it sells the same service since its beginning. This could lead you to think that this industry doesn’t change or improve. Nothing could be further from the truth; a lot of things are changing in the insurance industry. Here we’re going to discuss the particular changes caused by the digital transformation.
In this article, we are going to explore how the digital age presents multiple opportunities (and more than a few challenges) to insurance companies.
What digital transformation means for the insurance industry?
All sorts of businesses nowadays are dealing with digital transformation and one thing can be said with certainty – there is no turning back. Once a company goes through digital transformation it is no longer possible to go back to how things were before.
In many ways, it is a lot easier for customers and potential customers nowadays, regardless of the particular product or service in question. You can go online to compare different products and services, get recommendations from friends and family and eventually, share your own experience with a product or service. All of this can be done from a device that fits in the palm of your hand. That’s right, we’re talking about your smartphone.
The changes are so drastic that many companies that wanted to expand or even just keep their customer base had to transform and change their business model.
But, what does it mean? - It means making a strong commitment to innovation, it means to be ready to evolve and change the traditional business model. In the case of insurance companies, the traditional model includes designing and developing packages and distributing them through a network of agents.
It is essential to understand that digital implies constant innovation; and, if you want to gain long-term benefits, it is necessary to develop a business strategy in the context of the dynamics of digital transformation.
What are the benefits of digital transformation for insurance companies?
Today, people use their smartphones to upload documents, use apps to make payments, so there’s no reason why they can’t get updates and reminders for insurance policies.
Insurance companies that have already embraced digital innovation, the ones that did it early on, have generated great business value and other benefits such as:
Automation of manual processes for core business operation
Enhanced insights via data analysis
Efficiencies through workflows
Reduced business operations cost and time
Integrated design and systems enhanced customer experience (CX)
Improved risk management
What are the must-have trends in digital transformation for the insurance companies?
Interconnected portals and systems: communication is very important for digital businesses. There are partner portals, enterprise portals, and intranet portals that are already implemented used by insurance companies. Now it’s necessary to consolidate all possible channels and create an omnichannel digital ecosystem. Additionally, modern consumers engage with insurance companies on multiple channels. They search, recommend and share via omnichannel apps. Insurers need to combine all the components that can drive customer engagement at multiple levels.
Self-service portals: It is very beneficial for the customers and partners to have an overview of their performance, policies, prices, maturity, and payment dates. Having all vital information at a single place is becoming a must for insurance companies.
Seamless claims management: People are now using their devices to make claims. They take photos, upload documents and select their policies to make claims, and insurance providers need to scan and screen documents to settle these claims. This whole process can and should be digitized.
Cloud computing: Not only insurance companies, but almost every business that wants to go through a digital transformation is moving its business functions to the cloud.
Big data and analytics can be used by companies to get to know their customers better, to understand their needs and adjust the policies to meet these needs. Advanced analytics will also help them prepare for better risk predictions, pricing strategies, and other customer-related insights.
IoT (Internet of Things) - This implies using the digital trail that people leave to get a better price for their insurance policies. In short, it means going back to the origins of insurance - having personalized policies that adapt to the needs of each client, something that has been done in other industries for a long time.
As we can see, the digital transformation is happening and it’s necessary for the insurance industry. Insurance companies have to adapt to the new environment, to the new customers’ demands and the possibilities that come with the transformation.
The technological advance implies that gradually or quicker, insurance companies will need to adopt the changes and use new technologies to their benefit if they want to grow or at least subsist.
We believe that today there are countless possibilities for insurance companies that reaffirm their commitment to innovation and effectively implement innovative solutions. In an innovative ecosystem, it is much easier to work with new partners and to adopt new paradigms. This enables companies to stay on top of things and remain at the forefront.
If you want to know more about all these possibilities and you’re looking for a tech partner in your digital journey, don’t hesitate to contact us.