Insurance Digital Transformation: Trends and Best Practices
When experts talk about the insurance company of the future, they usually mention that it will become digital, its products and services will be personalized, and its business processes will be automated. But what will the customer gain from this, and are they ready for the technological transformation of insurers?
Digitalization is a common trend in most industries in recent years, including the financial sector. Many financial institutions are transforming to meet consumer expectations.
Companies are restructuring customer engagement and interaction channels, replacing offices with online applications. Insurance companies have always had a well-developed agent sales network.
But it is already obvious that the transition from the face-to-face format of communication to remote is inevitable for this industry.
New approaches to underwriting
Underwriting has been around for centuries. And while its basic principles have remained unchanged, the process itself is evolving. In recent years, new analytical and automated risk assessment tools have emerged. Several InsurTech projects are doing this.
Using big data analysis, artificial intelligence, and new sources of information, they are automating underwriting and making it more accurate.
There are technological approaches to the underwriting procedure in health and life insurance as well. The U.S Force Diagnostics company offers policyholders fast-track tests near their homes. The tests also reveal the presence of chronic diseases.
And the information obtained is shared with insurance companies, with the client’s consent, of course. Data on health problems (or the lack thereof) become an important factor in calculating the optimal cost of policies for clients and providing a healthy lifestyle discount.
Insurance automation and chatbots
Automation reduces human involvement in the underwriting procedure, receiving applications, processing them, and communicating with the client. Some of the tasks previously performed by insurance company employees are now being taken over by IT solutions: from relatively simple chatbots to artificial intelligence algorithms.
From the customer’s point of view, automation means interaction with the insurance company without the need to visit the office or call the call center.
The “window” of remote service for policyholders has long been mobile apps. Insurance industry software provides them with remote services – the ability to upload photos from the scene of an accident, ask an agent a question in chat or make a request.
Insurance companies are exploring social networks and messengers and developing chatbots for them. Chatbots can accept payments, calculate rates and sell insurance policies directly in messengers.
Template answers are available to them, but they can also use artificial intelligence technologies. In particular, they can understand questions and customer claims formulated in free form.
The technology of using chatbots is promising and effective.
Blockchain – the technology of the future
Developments based on blockchain technology, designed to automate the insurance services sector, are a very promising direction. Blockchain technology creates a single register with data on policyholders. It is accessed simultaneously by insurers, reinsurers, and underwriters.
Thanks to the unified access to information and its immutability, companies spend less time and effort on processing and verifying the authenticity of data.
Blockchain development for automating insurance procedures is a more promising direction. In this area, it is the multifunctional solutions that are interesting. They allow you to automate both the interaction between the client and the insurance company and internal insurance processes (for example, checking customer data).
Smart devices reduce the cost of insurance
Insurance companies are actively investing in smart systems for housing. Such solutions are the basis of “smart” insurance. The development of technologies in this area will allow insurers to predict and minimize the risks of insured events.
If the insurance company knows that the customer has installed a “smart lock”, it can reduce the cost of the policy. The smart lock is monitored around the clock using a smartphone, which means that the risk of theft is also reduced.
Marketplace services for finding great deals are becoming increasingly popular. Such platforms allow the user to select the product of interest-based on criteria and their personal needs. This niche is very promising.
Thanks to the marketplaces, the client has the opportunity to use services to compare prices, open accounts, and buy policies.
Experts agree that changes in the insurance company of the future will affect not only its technical equipment but also the way it communicates and its business model.
The status of the client will gradually change from a mass consumer to a partner with whom it is necessary to build an individual relationship. It is necessary to keep up with the times. Technology is our future.