With global markets available to do business, every company is spreading its wings in different geographies. This has put tremendous pressures on local players.
On top of that now digital technological advances, empowered consumers and innovative competitors bringing massive changes in the insurance industry.
In 90s, customers looked into yellow pages for local insurance brokers or agents, rang them to ask for help to get their insurance cover. Times have changed now with digital age.
Even though Insurance is one of the oldest industries to use statistics and modeling, compared to other industries, they have been slow to react to disrupting digital technology .
Key issues for insurance industry:
- Insurance is an optional product and this makes for a highly competitive marketplace.
- Increasing complexity of regulatory & legal requirements like Solvency II, IFRS
- Consumers now have on-demand access to endless information, customized products at lower prices and require less agent interaction than ever before
- Capturing & consolidation of reliable data from variety of internal or external systems
- Threat from non-insurance companies entering insurance business
Here are 3 ways insurers can survive this paradigm shift:
Manual to Digital: Modernizing the quotes, policy admin, claims processing systems will be a key. Simplified & quick insurance quotes, automated underwriting, easy to purchase and manage policies, digitized faster claims processing will help instant gratification to customers.
Big data Analytics: Till date insurers were struggling to collect the data from so many different systems. But with digital transformation, they can mine existing internal data and combine it with valuable alternate data sources like social media & health data to help gain 360 degree view of customers. This will help engage customers as individuals and offer them personalized tailored experience.
Customer first approach: Traditionally insurers interact with customers only when they buy a policy, pay the premium or file a claim which is periodic in nature, compared to banking or retail business. With customer first approach, insurers can go closer to customers and grow loyalty.
Benefits of Digital Transformation in Insurance:
- Faster streamlined quotes, policy and claims processes
- Properly mapped customer journeys with Big data Analytics to identify areas of improvement and opportunity for business growth
- Internet of Things with connected devices, sensors and digital imaging helping immediate assessment and processing of claims
- More effective and efficient fraud detection via Machine learning
- Increased digital channel adoption and native mobile applications which can deliver exceptional experiences to customers and agents
- Avalanche of data generated by connected cars, connected homes and electronic health records to improve risk assessment, innovate on new products
Digital transformation is a matter of survival for today’s insurers.