Rapid changes especially accelerated by COVID-19 pandemic are reshaping the insurance industry, and adaptive, open minded & forward-looking insurers aren’t just watching it happen; They are taking action, adopting and embracing technologies and keen to make investments that will help them become better at being customer-centric, improve processes in entire value chain and build operational efficiencies.
But with such accelerated pace of change and so much at stake, which are the key areas to focus?
Our team has identified 3 key areas and trends that should be in the list of top priorities for insurance business & technology leaders.
In today’s day and age of digital consumption and social media consumers have got varied complex needs and have multiple choices and more importantly are better aware and knowledgeable about their choices than ever before.
They want customised and curated offerings with relevant & tailored communication and hence its significant why insurers must focus on digitization of services and optimize all customer engagements.
3 key questions to ask about Digital Adoption & Omnichannel Distribution
- Digital Adoption and Omnichannel Distribution
Working with insurance companies since we started and possibly even in the initial stages in building an unified insurtech platform our team has identified three key sector/market developments, and the key areas to consider.
Market development 1: Customers want to infact prefer researching and buying products online and like to communicate majorly via mobile channels.
Question to ponder: How do digital and mobile channels enable insurers achieve growth and profitability targets by finding and acquiring new customers while engaging and retaining existing ones?
Market development 2: Consumers expect relevant, meaningfully customised and personalized communication.
Question to ponder: What are the best ways and possible channels that can be utilized to help reduce or preferably eliminate the communication gap and strengthen relationships with key customer segments?
Market development 3 : Insurance Agents and brokers want better data analytics and digital tools on carrier portals to enable them to better serve and engage their customers and acquire new business.
Question to ponder : How can insurers build on agency portals with new and end to end digital capabilities to support the entire distribution management lifecycle and customer journey?
2. Big Data,AI&ML & Analytics
Insurance companies are making significant investments in data analytics and leveraging emerging technologies(AI/ML/NLP) to streamline and optimize the entire value chain.
3 questions to ask about AI,ML & Analytics
Market development 1: Emerging technologies like AI,ML, (IoT),drones, social media, mobile technology and devices have significantly enhanced the data points insurers can leverage across the entire value chain.
Question to ponder: What are the best ways to collect,evaluate,analyze and manage new data to generate key insights and gain competitive advantage?
Market development 2: Although insurers realise the power of analytics to grow, streamline, optimize and assess risks and prevent fraud many continue to be overwhelmed by the significant changes necessary to transition to value-driven and ROI oriented decision-making.
Question to ponder: What organizational,departmental and cultural level changes are necessary to become data-driven and analytics-led business?
Market development 3: Leveraging data and AI,ML models to automate and improve underwriting and product development will drive revenues and profitability enabling faster scalability & entry into profitable areas.
Question to ponder: Which functions and processes should be modified & enhanced first?
Sensor data: how insurance innovators and early adopters are changing the landscape..
Sensor technology is a big contributor to big data and will profoundly change the industry. Telematics and other connected devices record driving patterns and can influence change in behaviors.
In-home and building sensors monitor environmental conditions and can enable impacting pricing and claims strategies.
Usage-based insurance (UBI): welcome to the new age insurance
UBI has gained good traction because it has the potential to generate substantial benefits, including:
- 40% reduction in claims cost
- 40% reduction in policy administration cost
- More effective pricing of policy.
- Substantially lower acquisition costs.
3. Core Systems & Applications- Legacy Transformation in Insurance
Core insurance systems are being modernized at scale to streamline and optimize processes, increase engagement & collaboration and reduce costs & increase revenues.
4 questions to ask about legacy system transformation for insurers..
Market development 1: Many carriers have procured modern, “rules and tools” core systems over the past few years.
Question to ponder : What’s the right balance wrt standardization and out-of-box product capabilities to reduce total cost of ownership?
Market development 2: With a single line of business/ geography up and running, most carriers are looking to extend these tools across the business and locations to optimize and maximise the ROI on their investments.
Question to ponder : How to demonstrate the business impact and ROI of core transformation efforts to scale up implementation?
Market development 3: Insurers adopt and embrace outsourcing automation and software as a service (SaaS) solutions to reduce costs and streamline processes.
Question to ponder : What’s the best way to adopt and embrace new emerging technologies to react faster without extensive recoding and reconfiguring existing systems?
Market development 4: Insurers are investing to extend and augment their core applications and systems platforms via customer-facing and agent-facing platforms and applications.
Question to ponder : Which back-office systems can be utilized to improve and enhance front-line engagements?
Summary & Bottomline
With strategic investment in these key areas, insurers can become more customer-centric, achieve growth, streamline and optimize processes and lower costs.
We at Artivatic are committed to help insurers improve pricing and boost profitability, enable stronger risk identification and underwriting efficacy and achieve more precise and accurate customer segmentation.
Customers gain improved pricing, increased responsiveness and tailored experiences created through leveraging AI & ML technologies built in-house by Artivatic team.