Digital Transformation Trends for Insurance Companies to Consider

1024 538 Sarah Lines

The insurance trade has been in the process of digital transformation for a number of years, slowly manoeuvring towards a more complete digital experience.

This process has been fast-tracked in 2020/21 to counteract the impact of the coronavirus pandemic – as is the case with businesses on a global level over the past year.

The ability to deliver a better service and an agile user experience to customers and employees alike is key to the future growth of the industry.

As such, the need for a strong digital strategy has been recognised as a primary concern for insurance providers looking to survive and compete in a post-pandemic world.

As a sector that has fallen behind in terms of digitalisation. There is now a lot of ground to make up in a very short space of time. 

Let’s take a look at ways in which insurance companies could transform their operations and bring about a successful digital transformation in 2021.

Embrace Digital Tools.

If businesses are to undertake a move towards digital, then it stands to reason that they’ll need to procure and implement digital tools in order to do so.

Whilst insurance companies have been utilising digital platforms in the past. Now is the time to embrace technology further. Particularly in areas that will provide an increase in the efficiency and reliability of self-service options.

The ability for customers to access documents, amend policies and resolve issues via online channels is increasingly in-demand, especially now, at a time where more and more people are working remotely.

Fortunately, the tools available to insurers mean that even processes that once required physical offline action, such as signatures, can now be completed online through technology such as eSignatures or finger-print/facial recognition software. 

There are, of course, security and data protection factors that must be addressed when moving these procedures onto digital platforms. So be sure to include monitoring applications into your strategy when researching the most suitable solutions.

Personalised Digital Services.

Personalisation is in demand and expected by customers in 2021. Insurers that offer a personalised service are more likely to engage users than those that don’t. 

Delivering tailored services creates a positive user experience and develops long-term relationships with clients, and offering a customer the right product at the right time for the right price significantly increases the probability of a sale

Artificial Intelligence and Machine Learning.

Automation is a key element in digital transformation and can be achieved through artificial intelligence (AI) and machine learning.

AI and machine learning provides faster access to data, increasing efficiency and accuracy in policy administration, claim processing, risk assessment and underwriting processes. This, in turn, improves the customer experience.

Joint Ventures with Insurtechs

Partnerships between insurance providers and insurtech companies are a way for insurers to become more digitally efficient without the need for in-depth training and the procurement of new technology. 

Insurers can create new income streams by utilising customer data and relationships, whilst the insurtechs provide the technology, technical knowledge and digital support. It’s a win-win solution for all stakeholders.

No-code/low-code Development. 

No code and low code tools allow for the quick and easy development of applications. The lack of coding means that apps can be built and tested by anyone, even those with little experience of software development.

The user-friendly nature of these options means that staff with even basic software development experience can implement and update UI (user interface) features.

This provides customers with the tools they want quicker and lessens the strain on the IT specialists within the organisation, reducing backlogs and improving productivity. However, there are downsides.

Firstly, no code/low code content management systems are great for simplistic app/website requirements. But if you’re wanting to make something more considered, innovative or complex, then these platforms won’t cut it.

There are very few (if any) no code solutions that are specifically tailored towards the insurance industry and offer all the elements necessary for an effective interface. 

Organisations must also consider the abilities and willingness of staff members to learn the basics or to have the time free to do so.

Factoring in data protection laws and the level of security required, it’s not entirely sensible to leave the development and maintenance in the hands of inexperienced team members.

In the end, you will likely save neither time nor money in the use of no-code, drag and drop solutions. Consider this and the limitations of these tools when considering implementing these platforms over bespoke systems developed by professionals. There are areas that can benefit from such applications, but not all.

Utilising IoT to Inform Policy Pricing.

IoT data analytics is the analysis of high volumes of data produced by devices connected to the internet.

Insurers can derive many benefits from the wealth of information provided by IoT, including optimised operations, automatic processes and increased customer and employee engagement. 

Providing accurate real-time data improves risk assessment abilities, which subsequently offers policyholders a clear view of what their premium includes and how much it will cost.

However, there is room for much improvement in this area before the true value can be derived.

Blockchain Technology.

Adopting blockchain technology is a must for insurance companies in 2021. As insurers move towards a fuller digital experience, the risk of cyberattacks become ever more present.

Blockchain technology is – in its simplest form – a system of recording information in such a way that it is impossible to hack, modify or manipulate.

As technology becomes smarter and more powerful, the need for a solid security system is paramount.

The Benefits and Challenges of Digital Transformation.

The opportunities for digital transformation detailed in this post are key to insurers becoming digital-friendly at a time when ease-of-access, personalisation, and security are all prime considerations.

It is worth noting, however, that whilst embracing digital processes is necessary to the growth and future success of the insurance sector. It should not be done at the expense of a quality user experience; or with a view to saving money and time without considering the negative impact of such decisions.