The emergence of digital technology has disrupted the insurance sector completely. Though the industry has taken a bit longer to join the technological rush, digitization is now playing a critical role in the insurance landscape. Insurers that still use traditional methods to carry out their operations are sure to face several bottlenecks in their operations, resulting in inefficiencies and lower customer satisfaction.
A new environment is taking shape and will affect the entire insurance value chain. With more policyholders beginning to handle their transactions online, insurers are becoming more productive.
Insurers can address disruptive changes and drive profitability and growth by transitioning into a digital enterprise and developing new business models. Companies are adopting developing digital tools to better interact with their customers, streamline their processes, assess risk better and reduce cost.
Digitization is already started affecting the way insurance companies do business. But only a few insurers have created a roadmap for how to change. Insurers must maintain an ecosystem that delivers a digital customer experience. All the processes involved should be automated to a great extent. McKinsey’s research shows that more than 70 percent of insurers take from six months to more than a year to move a digital initiative from idea to implementation. That is too slow.
It’s time; insurance companies need to reimagine the whole consumer experience. This will help insurers engage with their existing and potential customers in previously impossible ways. Personalized insurance plans, automation of claims processing, chatbots, and data analytics are a few aspects that can change the face of the insurance sector and elevate the customer experience.
Insurers must focus on better data handling solutions. There are so many players in the competition and each one of them has voluminous amounts of data – both structured and unstructured, but only the ones turning that data into useful insights will benefit.
By analyzing customer data, insurers can deep dive into the customer behavior, assess risks better and accordingly price the insurance policy. Analysis of the customer data can further offer prescriptive insights in improving customer satisfaction.
To help customers with their information details, a significant amount of resources are invested in maintaining the call centers. Insurance companies can now automate a part of the customer service through chatbots.
Customers can have conversations with the chatbot and get information regarding their claim status, premiums, etc. By keeping track of customer insights, chatbots can provide better advice on quotes and insurance claims. With Machine Learning (ML) processes and human expertise, chatbots can handle customer’s queries, thereby reducing the load on the customer support vertical, cutting down costs, and faster resolution time.
Traditionally, the risk assessment of an individual relied on pre-determined risk buckets. Insurers were largely dependent on average collective risk rather than specific risk. Nowadays, wearable devices and social media activities can help insurers understand their customers better and more accurately assess risk. At the same time, insurers must access customer data only after receiving their consent and maintain data privacy. Consequently, individuals can receive personalized solutions and cheaper quotes as per their requirements.
Leveraging newer technologies like artificial intelligence (AI) means a more seamless claims process and fewer chances of frauds, thereby benefiting both the insurer and the customer. Advanced ML algorithms can swiftly analyze past data basis claim descriptions. This will enable the insurer to make faster claim decisions, while also lowering the probability of human error. For instance, in case of an accident, the insured individual can upload pictures of the damaged car. AI tools can then be leveraged to assess the damage, and authenticate the claim.
Digital initiatives powered by technology will drive the insurance sector, while also opening new opportunities for customer engagement. Companies that can adapt to the changing landscape will be better positioned to serve their customers.