Technology Driven Disruption of the Insurance Industry
Rapid advancements in technology has changed the way businesses run their processes and interact with their customers. Every sector, no matter how tradition – is seeing a radical change. Cloud based services have made even the most revered technologies, like machine learning and artificial intelligence, accessible to the every business. Commodification has allowed every business, no matter the size, to experiment with the latest advancements.
The insurance sector is seeing a shift, rather slowly however, in how they run their processes. The digital age has given rise to competition, where the established names must compete with the startups of today, on the platform their customers live on. Insurance companies are looking towards technology to help them win the digital customer, streamline internal processes, and generally make the process a lot less dreadful for the customer.
Here are some technology applications, we think can be a game changer for insurance companies.
Data Driven Approach To Insurance
Availability of data and the ability to make sense out of the huge amounts, in near real time, can change the way insurance companies evaluate applications. Traditional method of relying on historical data, with predefined methods and partial subjectivity can now be replaced with more accurate, case-to-case evaluation of applications.
Not just issuance, even insurance claims can be made a lot more objective. Motor insurance claims could be evaluated more objectively thanks to IoT. Health insurance claims can be almost instant with a central repository of patient data, securely stored on the cloud – accessible to authorized personels only. Fraud detection algorithms can be made more intelligent by continuously feeding them data with a near real time feedback loop.
Leveraging Platform and Cloud Economy
Platform driven strategies have been the single biggest factor in changing the way companies conduct their business. Increasing power of cloud computing, reducing costs and secure storage solutions, these factors have made it possible for big companies to reduce latency and streamline their processes.
Third party providers of cloud solutions have further reduced the inertia by providing out of the box solutions. Software consulting firms specializing in cloud platforms can help with the implementation. The banking sector is already seeing a major shift to the ‘cloud banking’ systems. It’s only a matter of time before insurance companies follow suit.
According to a survey by Accenture, 83% of the participating insurance agents believe that platform driven business models will be a key aspect for growth in the next 2 years.
Mobile First Approach To Marketing
One of the basic principles of marketing is to be present where the customer is. According to a study, 64.5% of the global population were mobile phone users. It only makes sense to modify strategies to reach, market and sell to the ‘mobile’ population of the world.
Quite like the banks, insurance companies can do well with adapting a mobile first strategy. Mobile banking applications have opened up a whole new world by allowing users to transact with and manage their bank accounts on the go. A similar approach with custom mobile apps for insurance companies could help them reach the digital consumer faster and help build brand loyalty. Mobile presence also helps companies interact 1:1 with their customer, providing better customer service as well as tailored products.
Automation To Reduce Redundancy
Key to winning in the digital age is to replace manual, time-consuming processes with intelligent automations. Insurance agents could do better with spending more time interacting and onboarding new customers rather than sifting and scrolling through documents.
Automating customer service through intelligent customized chatbots is one of the fastest growing trends this year. We have seen a lot of interest from clients, both old and new, willing to experiment by partially replacing their customer interactions with a chatbot. Another class of chatbots that help people manage their personal wealth have seen a lot of interest. Insurance companies could as well look at intelligent, automated systems that help people with their insurance applications, renewals as well as claims.
Winning in the digital age would require companies to adopt a leaner, more agile approach towards processes, marketing as well as selling. Quality of products offered can also be dramatically improved and personalized by leveraging data and technology.
Fintech has been one of the most talked about markets in the recent past, and for good reason. Insurance companies need to catch up with the times or risk losing market share to technology driven startups.