How digital transformation is changing the insurance industry?
Everyone has got their definition of digital transformation. Yet, everyone agrees that it changes how we operate fundamentally. It is profoundly impacting the business. Digital transformation is all about integrating digital technology into all areas of the business to deliver value to the customer. This value to the customer involves more than just changing technology stack and processes. It also encompasses revenue and shareholder interest.
Digital transformation is revolutionizing almost every industry. Case in point, the insurance industry. Fortunately, the insurance industries are more open to technology changes.
Insurance companies seem affected mainly by the following reasons:
- The pace of technological change
- Changing consumer behavior
- Low barriers to entry for new competitors
- Increasing regulations
As per McKinsey, customers have clear expectations from insurance companies when it comes to purchasing insurance:
- They do not want a complex process and seek simplicity
- They expect 24*7 access and assistance across every channel
- They expect quick and relevant information e.g. premium to be paid, regulations and policy details
- They usually expect customized and tailor-made services which fit best to their needs
Our team of insurance domain experts has identified three-pointer system to successful digital transformation in insurance:
- Innovation – It has become very important for insurance companies to have digital innovation. To overcome this challenge, the insurance company must develop an end-to-end solution such as making a simple process for buying policies, using AI for insurance fraud detection, automating claims process, utilizing mobile phones for uploading images for the claim processing.
- Building a long-term relationship with customers – For insurers, it has become very necessary to focus on digital customer experience. While utilizing the technology for enhancing the customer experience, insurers have to consider this fact that new business model adoption won’t be easy. To succeed in this, insurers must develop a long-term relationship with customers through meaningful conversations that are based on empathy. Insurance companies, hence, need to adopt a new and digital-first style of working that may be very different from their current way of working.
- Shut down legacy system – It is important in any business to cut cords with traditional ways and keep pace with new changes. The entire approach of business companies should shift from selling just insurance products towards offering services. This can happen with effective utilization of technology solutions such as AI, blockchain, RPA, telematics insurance, etc.
We do understand that digital transformation is changing the world. Insurance companies need to catch up with changing environments and developments.