Digital transformation for insurance has been slow to adapt, which was primarily protected by regulation, complex products, customers’ behavior, besides many other reasons. But all that is changing post COVID-19 with new age technologies impacting all areas of insurance (e.g., distribution channels, products, underwriting, claims, and servicing). Even business models are shifting as technology is making in-roads to impact system inefficiencies. That’s why insurance needs to pivot and FAST.
Insurers are seeing a lot of value in digital innovation in insurance to drive higher customer satisfaction (C-SAT) through improved service and faster processing times. At the same time, by digitizing their existing business, carriers can remove significant cost across the value chain, further increasing customer lifetime value and creating new revenue streams.
In today’s competitive marketplace, insurers must meet customers where and when they are needed. The digital innovation in insurance – powered by artificial intelligence (AI), machine learning (ML), predictive analytics, and cloud computing with big data, etc. – is enabling insurers to enhance customer experience (CX), improve revenues, and profitability.
The COVID-19 pandemic forced rapid change across many industries. The hospitality and travel industries may be the most visible, but behind the scenes, many other industries and companies have also found out that they needed to adjust to the pandemic, which in many cases became permanent.
I believe there are at least five areas where insurance companies can focus on, if they want to change and turn uncertainty into a business opportunity:
- Digital onboarding – Seamless digital CX in policy purchases, claims filing, and receiving payouts. Electronic know-your-customer (e-KYC) and biometric authentication to verify online users during the application process or regular transactions.
- Omnichannel CX – Better CX across preferred channels, digitally manage brokers and agents, and increased self-serve capabilities
- Hyper-personalization – Improving user experience (UX with real-time data to personalize services and products for better sales and loyalty. Advance analytics coupled with machine learning and internet of things (IOT), create an insightful and responsive customer experience.
- I in underwriting – Personal devices (e.g., fitness trackers, home assistants, smartphones, and smart watches) will allow carriers to understand their clients more deeply, resulting in new product categories, more personalized pricing, and increase in real-time service delivery.
- Fraud prevention – AI and ML-powered fraud prevention in claims management, which identifies high-risk in claims upfront. Building an Exchange-to-exchange (E2E) fraud monitoring interface to give a 360-degree customer view.
- Pay claims in real time - Taking advantage of the speed and efficiency of digital technologies, insurance providers can reduce the pain and shorten the time it takes to disburse funds. There are many ways that customers can receive payment in a timely manner, most notably via digital payouts. For example, an insurance company can pay a customer digitally via digital wallets, through Venmo and PayPal or directly to the customer’s bank account rather than issuing a check and sending it in the mail. This allows the customer to control where the funds are delivered and helps reduce operational costs.
The COVID-19 pandemic was a wake-up call, but digital transformation for insurance sector has been evolving to offer more flexible and tech-enabled services for several years. However, the emphasis on flexibility is now critical in this new business environment. All insurance companies need to embrace the opportunities listed above as the world we knew before 2020 is never returning.
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