The insurance industry worldwide is in the midst of digital transformation, with insurance providers attempting to apply new technology and modern ways of doing business to an industry that is both heavily regulated by governments and often reluctant to change ways of doing business that have been in place for years. As such, many institutions within the industry may experience slowdown in their adoption and application of new technologies.
The result is a need for technology that helps support and empower insurance companies to be as fast as possible in how they can adopt new solutions and meet the everyday needs of customers. In addition, this technology must be dependable and highly secure to protect the vital data used within everyday business. However, in order to embrace change, insurance providers must better understand both what is slowing down the digital transformation process in their industry and what modern technology can do to quickly and efficiently embrace change.
Why Does the Insurance Industry Need Digital Transformation?
As discussed by McKinsey, the insurance industry is one of the last to undergo large-scale digital transformation as its companies have been largely insulated against potential disruption. This is due to government regulation, the complexity of the services offered, large capital requirements for being a major member of the industry, complex business networks, and a wide array of policies that need to be reviewed during every procedure. Together, these elements have long prevented upstart companies from entering the industry and from fast adoption of new technology suddenly changing the way business is commonly done.
However, the continuing advancements made via digital transformation in other industries have now come to the insurance industry. As companies around the world create modern digital experiences and allow customers to shape online services around their individual needs, customers within the insurance industry begin to expect a similar level of service that they experience elsewhere.
The biggest cause of digital transformation in the industry is that insurance is based on customer self-service, which is supported by highly trained employees. Today, modern customers expect digital services that match the precedent set by companies like Amazon. As such, it is important for the modern insurance provider to give audiences a wide array of effective tools built for many different life circumstances, but also a customer experience that is streamlined and helps empower individuals to care for their unique needs.
Along with satisfied customers, the impact of digital transformation on insurance customer self-service can also be seen in finances. According to Forbes, process automation enabled by insurance digital transformation can result in up to a 65% reduction in costs, which is helping to propel transformation in the industry.
How Modern Technology is Speeding Up Insurance
Today, insurance providers around the world wonder what role insurance technology will play in either helping or hindering their standing in the industry. However, the many new insurtech applications being created are meant to enable, not undermine. But in doing so, they can be seen as a disruptor in the industry.
A well-run company should be able to execute in any industry by acquiring and retaining customers. This means that any company looking to embrace digital transformation will require effective tools and a trained team to perform well no matter the industry. The effects of digital transformation within the insurance industry are not the new cause of giant disruption, just the evolution of and continued growth within technology used throughout the industry. Companies who seek to grow and meet modern customer expectations will use these new tools to empower their workforces and long-term business strategies in ways that were not possible beforehand.
Today, brokers are beginning to gain access to data and tools that big insurance companies have had for much longer thanks to the increased accessibility of such solutions. Brokers are attempting to leverage analytics to determine the best and longest-lasting acquisitions for substantial financial gains. However, the vast amount of data being generated by customers and prospects needs to be managed and utilised through predictive analytics in order to create personalised insurance package services, which both individuals and organisations commonly expect in the modern age of insurance.
As a whole, modern insurance companies have made great strides in analytics and have begun applying omnichannel experiences to their online presence. However, most are very early in applying deep customer insights to the data they have collected to create more effective customer experiences.
These new challenges and opportunities mean that insurance providers of all sizes can innovate in exciting, meaningful ways that empower employees and better reach target audiences. Together, they make digital transformation in the insurance industry not just a priority, but a meaningful next step for companies around the world.