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How Insurers Going Digital can Succeed in 2022

Sep 30, 2021

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By: Andrea Nalupa

Part of our Banking, Financial Services, and Insurance Series


As more insurance companies are being driven by public demand to step into the digital space, we’re seeing more of them coming up with mobile apps and digital systems. For many traditional and conservative insurers, this is a giant step of innovation. However, research finds that consumers and prospects prioritise great service significantly over innovation [1]. At this point, how can insurance providers deliver this while making the most of digital resources?

With a Customer Experience Overhaul

In the traditional setup, many insurances have found the strategy that worked for them – a simple, standard process easily navigable for clients. But in the digital realm, this customer experience or CX provided is proving inadequate. Though digitising core products and offering a digital platform for clients is indeed a feat, it may not be enough to attract and sustain a positive relationship with clients.

Many of the functionalities of digitised insurance platforms were made in the effort to replicate the physical process. This can be attributed to the large success of the simple and streamlined nature of transactions before 2018. However, a recent PwC report revealed that 44% of insurance executives no longer believe that existing physical-based business models would survive in their current form. Why? Because client preference has shifted to the conveniences of digital transformation [2]. In that case, it makes no sense to simply transfer the physical process onto your digital platform.

It has been found that to truly succeed in the digital age as an insurer, a business must provide their clients with a holistic human experience. But how can you achieve this? By truly putting your clients first. By figuring out the needs of each of your clients with an extensive KYC process and taking the necessary steps to supplement identified needs, you can build a stronger, more enduring relationship with them. 

For example, technologies such as Artificial Intelligence and Machine Learning can specifically help with your process of understanding your clients with their ability to process both consolidated and specific information and provide you insight on your patron’s preferences and demands. Automation can help you apply such insights 24/7 by working off of the data to carry out various tasks servicing even millions of clients at a time. And most importantly, designing a holistic user journey as well as your interface with your consumer in mind can make all the difference.

Through Niche Digital Products

On the topic of creating a better customer experience, another way to positively engage clients is by providing them a journey that extends beyond themselves. As human beings are naturally a species of community, allowing them to practice social dynamics even just through interactive insurance management is a promising way to increase satisfaction [3]. The manner in which we consume and utilise technology very much needs a sense of community – and that’s exactly the void you can fill in the digital market.

According to research, there is a market for “extended” or group policies and family-managed insurances [4]. Beyond company insurance, other groups and communities such as families, couples, friends, and even sports teams should be able to enjoy policies and products that allow them to manage and employ insurance dynamically. Apart from finally paying attention to these underserved populations, offering tailored and inclusive products that foster community through insurance can help you transform the role and scope of insurance and your business.

By Automating the Claims Journey

With so many smaller yet complex processes inscribed in the larger claims process, it becomes increasingly difficult to serve the growing population of policyholders. The impact of this is not only felt by overwhelmed companies but by clients as well. The impact manifested in layers of service slowness or delays, manual errors, and limitations on the number of clients served all build up to clients not getting the value or service they want from their providers. And this is threatening insurers with the permanent withdrawal and exit of clients and avoidance of target consumers [5].

Automation is a straightforward yet encompassing solution to such issues. Its capacity to carry out complex tasks at scale and with minimum human intervention (implying reduced manual errors) can effectively eliminate all the aforementioned complications. This allows insurers to be more efficient and effective on both the internal and external fronts. On top of all that, it can also reduce the operational cost across the claims journey by up to 30% [6].

Key Takeaways

Insurance institutions are discovering the right direction to business sustainability and success. More and more are learning to future-proof their business. However, success is ever-changing and even more so, elusive. It does not change to accommodate where you are, nor retain its “requirements” to wait for you. Therefore, achieving success is not only about the direction. It’s also about moving fast enough to achieve it before it changes the stakes and leaves you behind again. 

Digitising basic functions is a milestone, but when the rest of the world is already moving onto more advanced and better-serving technologies, you are still left behind. In insurance, steps towards digital transformation are valuable, but they will only be rewarded when done at the right timing and speed.

Read more about banking, financial services, and insurance here

Endnotes:
[1] Accenture, “Service, not innovation, impresses insurance customers”, 2019
[2] Lifereay, “4 Challenges in Moving to Digital Insurance”, 2019
[3] Yamamoto & Ananou. “Humanity in the Digital Age: Cognitive, Social, Emotional, and Ethical Implications”, 2015
[4] Slayton Search Partners, “5 Market Trends in Group Insurance”, 2019
[5] EverQuote, “3 Reasons Your Insurance Agency Is Losing Clients (& How To Stop It)”, 2019
[6] McKinsey, “Digital disruption in insurance: Cutting through the noise”, n.d.

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