Why The Insurance Industry Should Embrace the Digital Transformation?
The world is changing, digitally. We are moving towards an era of lessened human intervention. Rapidly evolving technologies have brought huge disruptions to their digital platforms. We are seeing autonomous cars, contact-less payments, and chatbots that advise people on how to manage their wealth and investments.
While digital innovation has become the norm in many industries around the world, the COVID-19 pandemic has expedited the urgency to move to digital and – out of necessity – has pushed many companies into it much faster than expected. But insurance providers, particularly in commercial, have been slow to shift to digital.
Why is digital transformation important in the insurance industry?
The insurance industry touches most of us: whether it is as a customer for your car, health, house; for your various business needs; or more deeply if you work in the industry. Customer expectations are constantly changing with millennials now making up a growing section of the market and most customers can now buy insurance policies and much more at the click of a button.
As consumer demands increase so should the industry. For insurance carriers to continue to be successful, they need to find ways to be present in the financial lives of customers at any time, any place, across any channel and on any device. This may involve creating solutions to modernise core business systems, improving business and risk insight and enabling a seamless digital customer experience.
Though market participants claim that the insurance industry is not an early adopter of digital transformation, new players, business models and demanding customers are forcing the industry to adopt digital technologies. Consequently, the insurance + tech market together is expected to grow by around 45% annually between 2022 and 2025.
What does digital transformation mean for insurers?
Given the increasing demands of customers and the competitive landscape, insurance companies need to be able to leverage digital technologies to stay ahead of competitors. With the implementation of digital technologies, insurance companies expect to improve customer experience and increase operational efficiency.
As the cost of living continues to increase exponentially, insurance is one of those services that will come under increased scrutiny as consumers look for the very best product and value. Against that backdrop, differentiation is more important than ever before.
Advantages of Digital Insurance
1. Reduces Cost
Technology has bridged the gap between the insurance company and the policyholder to a considerable extent. This is possible due to the standardisation and instant and comparable information. The traditional method of marketing by spending high on operating expenses, especially in advertising and infrastructure has reduced considerably with the advent of digital marketing.
2. Brand Awareness
Digital marketing strives to educate customers about the insurance company’s products through their website which offers informative and quality content. Insurers can use their social media handles, apps, texts and email marketing to increase brand awareness among potential customers.
3. Post-Sales Service
While the initial response during the purchase stage of an insurance policy might give customers the right experience, there is a general impression that customers are forgotten after a policy is sold. However, with digital insurance, post-sales service such as the process of raising a claim is hassle-free offering a paperless translation. Also, insurance companies are using their social media handles to receive feedback and complaints to resolve issues. This way they are able to provide a better post-sales service much faster compared to the traditional insurance companies.
4. Customer Interactions Have Gone Digital
Customers are increasingly looking for instant answers to their queries. Gone are the days when the customer had to write a letter to the insurer about an issue or a query. New-age insurance companies are using chat facilities to ensure customers are able to find answers immediately. Insurers have also introduced new technology such as chatbots which has eliminated humans to provide answers to some of the frequently asked questions. This has reduced the time taken to find an answer to a query.
5. Synchronous processes increase sales, productivity and profits
Digitization can increase the sales productivity of an organization by almost 10-15%. By analysing a customer’s need, insurance companies can develop and market products and services which perfectly fit their client’s need. Insurance companies using the right data can propose solutions that can almost instantaneously turn a potential client into a customer.
6. Predictive Analytics allow critical business insights to take faster decisions.
Predictive analytics will help you make better business decisions based on insights and trends found by extracting information from your data. This information will lead to a better understanding of your customers and help you identify potential opportunities for your business. Predictive Analytics will also help you optimize your resources and improve margins across your entire business, contributing as a major factor to your business growth.
Digital will define the future of the insurance industry
The revolution in customer expectations is triggering an evolution across businesses, small and large. Nearly every insurance company, regardless of size or structure, must consider when and how to transform into a digital company. The good news is that companies who’ve introduced digital capabilities have already started seeing the benefits.
While the benefits are endless, digitization will require increased security too. From keeping up with the social media posts and comments to constantly being in the know of everything that’s happening about your brand and the insurance industry online to even maintaining your customer’s satisfaction requires multiple levels of information and security.
Online risks can be complex and involve much more than publishing content and handling customer service issues, Aviva recognises that these risk needs to be addressed. Our Specialist Partner Aviva along with RiskEye offers businesses the opportunity to protect their reputations online. These solutions are available to Aviva customers at a preferential rate.
Read about the services, benefits and what we do to protect and guide you through your digital transformation at Riskeye.com