Digital transformation has a new face now and is making its way into almost all industries starting from healthcare to manufacturing, transportation, and finance. Almost all of the insurance industry is not left behind either. The insurance industry is pressured to change quickly as the consumers’ demand for convenience, speed, and accessibility increases. To meet these new demands, insurers must adopt the new digital insurance model, which involves the use of technology in every aspect of the insurance business.
Digital insurance transformation can be challenging because of the various aspects that are contained in the insurance industry. However, with the onset of technology in the commerce sector it is a lot easier to achieve this transformation. This guide will bring a clear understanding of the area of digital insurance, the necessary tools to work in the field, and how to start a successful digital insurance transformation.
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Understanding Digital Insurance
In that case, it is pertinent to ask, what is involved in digital insurance? Is it just about being present on the World Wide Web or merely using Artificial intelligence-facilitated data analysis? What if it is used only by the companies that are established solely online? Digital insurance covers all these and many more.
More specifically, the term ‘digital insurance’ means an insurance company where technology plays a central role in selling policies and managing risks. To be relevant in today’s market, any insurance company must have a solid digital experience strategy rather than a website. Effective strategies for digital insurance organizations to stay relevant is to integrate both digital and telecommunication technology and human approaches to insurance services delivery in response to customer needs for self-service and personal attentiveness.
Digital insurance represents a paradigm shift towards providing a seamless, integrated service experience that meets consumers where they are: online. Clients want the convenience of online engagements but still want the option to speak to an actual person whenever it is necessary. Therefore, digital insurance is not just about the pretty face of the Internet, it is about a 360-degree change with the customer at its epicenter.
Essential Digital Insurance Tools
To meet customers’ expectations concerning digital services, insurers must implement digital solutions that can improve both external and internal services. Here are some key technologies driving the digital insurance revolution:
1. Artificial Intelligence (AI)
Artificial Intelligence is becoming a popular trend in the insurance industry to improve insurance services and customers. This leads to improved customer interactions because of voice interfaces, and efficient workflow because of the automation of processes together with information-based decision making. For instance, to recognize negative tonalities in customers’ e-mails so that the agents can intervene and solve problems for greater customer satisfaction.
Underwriting, pricing, and claims are other aspects where AI is gradually creeping into and becoming part of the solution. As estimated by PricewaterhouseCoopers, AI shall be able to bring new business opportunities, fraud detection, and customer loyalty, that is, churn rates. The opportunity to use AI in this way and in so many areas makes it an essential element of digital insurance.
2. Machine Learning
Though generally associated with AI, machine learning has its uses unique to the digital insurance environment. They use data to get better and faster in the underwriting, the claims, and the pricing. One of the ways that machine learning algorithms work on large volumes of data to help detect areas of fraud is in claims that a human might not be able to find.
Machine learning can analyze data and learn without any human interference and that is why it has become an eminent tool for insurers who wish to improve operational outcomes and precision. For example, it can help evaluate previous claims data to identify abnormal trends of citizens that indicate that they are involved in fraudulent practices and enhance risk control and expense savings.
3. Internet of Things (IoT)
The use of IoT in insurance received a lot of attention because of the ‘real-time’ data gathering and risk management. Enduring solutions such as fitness tracking smart apparel and wearable devices for tracking physical activity; and home automation gadgets for controlling different elements of a house, IoT is presenting insurers with fresh opportunities for tracking risk and incentivizing individuals and firms to maintain safe behaviors.
IoT can be embedded into cars for the insurers to be able to get data they can use to change insurance policies and encourage individuals to drive safely. For instance, Progressive Insurance Company has a monitoring device that follows the driver’s activity on the road; safely oriented drivers are offered discounts, while the insurance company amasses useful information for underwriting.
4. Big Data and Analytics
It is no secret that data is the heart of the insurance business, and this role has only increased with the advance of digital technologies. The combination of big data and analytics helps insurers to maximize the use of data in decision-making to optimize the value for each process and activity of the insurer, in underwriting, pricing, marketing, and other value-added services.
Big data analytical models work together with computing tools to manage big data and swell out complete analysis. Insurers are in a position of having concrete data in their possession which can be transformed into actionable strategies through the application of big data, AI and machine learning.
5. Blockchain
Blockchain solutions that can improve the privacy and integrity of data, simplify claims management, and reduce fraud cases are applied in the insurance industry. Each transaction made on a blockchain is encrypted and connected to the previous transaction and the next one, making it almost impossible to manipulate hence the word ‘chain’.
Blockchain can be used to check the validity of the insurance claims an organization proactively presents and to fasten the process and be efficient. Although the detail could be safely decreased, its security aspects can minimize the probability of data leaks, secure clients’ information, and enhance consumers’ confidence.
6. Customer Relationship Management Systems (CRM)
One of the main tools that need to be developed well in insurers who want to do well in the digital environment is the Customer Relationship Management (CRM) system. Today CRM can facilitate a number of insurance possibilities that are web-based such as servicing customers via web, and web billing, as well as possessing data analysis capabilities.
An ideal CRM should provide integrated customer details so that he/ she fetched from another interface is also visible from the other interfaces. Tools such as live chat, video consultation and integrated policy management customer portals enable customers to review, and alter their policies, and report claims among other services; all from one place. Organizational: internally the CRMs assist insurance agents/adjustors with the proper distribution of work hence productivity and satisfaction of customers.
Why Digital Insurance Matters
Handling the insurance business in the online environment is no longer a nice addition or even a preference – it is a need in the context of the current market. Here are five key reasons why insurers must adopt digital capabilities:
Meeting Customer Expectations: Today’s consumers demand a fast, easy, and seamless service experience that is also multichannel. These expectations are met through digital insurance solutions like AI-based chat bots and more importantly easy-to-use digital self-service portals.
Speed to Market: New product and service introductions, market changes, and new channels are easily addressed through digital solutions for insurers. This agility is vital for winning new customers and for being ahead of the competition.
Fraud Detection: Information technology solutions such as artificial intelligence and data analytics help in detecting fraud as they help in recognizing peculiar trends and actions that might be an indication of fraud. It also prevents the insurer from going bottomless while at the same time creating more standard of trust within the insurance industry.
Enhanced Employee Experience: These tools also help insurance employees to be empowered by offering them accurate and updated information about the customers. This not only increases efficiency but increases job satisfaction as employees can effectively do their work for customers and get the right results.
Some of the steps to achieving digital transformation in insurance include the following;
While implementing a digital insurance strategy, insurers must have a single converged Engagement platform that includes all the Digital Solutions needed for the Insurance Company. Businesses such as Hitachi Solutions provide complete solutions including CRM systems, custom application developments, and analytics, among others, to insurers on the path toward their business transformation.
When it comes to the modernization of old platforms or the adoption of new digital technologies the major challenge for insurers lies in making their approach integrated and customer centric. Through implementing digital insurance, firms also have an opportunity to satisfy the consumers’ needs and wants in the present moment and prepare for future success in a more digital economy.
If you are willing to enhance your insurance operations, learn more about the possible digital capabilities and know who can help you.
As an organization becomes a digital-first insurance company, this does not only work well in the process aspect but also in the customer, employee, and partner satisfaction aspect which determines the longevity of an organization in an ever-transforming industry.