There’s no doubt that the insurance industry has witnessed a profound transformation in the last few years than it did in the last few decades and the rate of acceleration in growth and opportunities has been massive and infinite. Most of these changes were long overdue, they have finally set the stage for a more disruptive future for insurers.
One of the key disruptions has been the digital transformation that insurance businesses have undergone or are undergoing. It has been helping insurance businesses to continuously innovate, offer products and services in tandem with changing customer preferences, provide powerful customer experiences, cover evolving risks, enhance their operational efficiency and agility and so much more that is ultimately ensuring that customers are at the core of everything.
Though the pandemic accelerated the changes in the insurance industry, insurance players need to sustain these transformations and their implications and innovations post-pandemic as well. When on one end of the spectrum lies a huge potential for life and health insurers with the shift in demographics, there are increasing and massive gaps involved in the risk coverage for cyber threats and impending climate changes. Six major hurricanes and almost 30 named tropical storms added up to five once-in-100-year events in the previous year. It’s difficult to overstate the impact of climate change and hence to prepare for the future, insurers need to develop solutions that protect people and industry and help them rebuild after catastrophic events. Add to this equation, the growing competition from banks and other financial institutions.
With immensely anticipated and non-anticipated changes on the way, insurance businesses must prepare themselves to adapt and thrive. One of the key factors that can give insurers a competitive advantage will be the transformation initiatives that connect and optimize all links in the value chain. Every traditional value chain component can be enhanced by stronger digital capabilities and advanced technologies.
Insurers to ensure that they get it right, win over customers and widen their revenue sources, will need to make some bold moves and innovate better and smarter- ecosystems are one of them.
Insurance Product Development
Recent research revealed that the insurance industry has created approximately only 5 new product classes during the past three decades. But ever since the pandemic, most insurance businesses have begun to rethink, re-evaluate and reimagine products and services in tandem with the emerging and evolving needs and preferences of customers. But to design better solutions, they must be systematic about embedding customer insight into product innovation.
Marketing & Customer Service
We have advanced to a digital era where, thanks to the changing demographic and their needs, customers are looking for hyper personalization when it comes to insurance products and services.
The more personalized the offerings are the higher chances of them remaining loyal to their existing insurance carriers. More than 60% of insurers, as per recent research, believe that tailored engagement based on past interactions is very important to win customers and boost profits. Even with the colossal amounts of data generated from customers, insurers are unable to innovate as per the needs of the customers, since they fail to predict or even identify when their customers might be ready to buy a home or start a business. This just reiterates the fact that insurance businesses are still overlooking one of their key assets- data. Smarter digital interactions and more effective predictive analytics are critical for insurers seeking such personal engagement. They will also help insurers strengthen consumer trust by balancing personalization with privacy concerns.
Yet another key competitive factor for insurers is to deliver great experiences and personalized service at every touchpoint. Research shows that insurers have plenty of room to improve and could emulate the practices of top performers in other sectors. In a time of crisis, insurers are only a few quality interactions and experiences away from delighting customers. Educating customers about their true risk exposures and the right approach to protection is a great place to start.
Better technology and richer data sets will enable underwriters to identify profitable risks more quickly and assess market demand for new products more accurately. Insights that take hours or minutes to generate today will be available in seconds tomorrow. Gone are the days when referral and pricing processes played out over weeks, by which time clients were often long gone. Automated data ingestion, third-party data streams, AI, and predictive analytics will help underwriters do their jobs better, faster, and smarter than ever before.
The claims experience has an outsize impact on client loyalty, longevity, and likelihood. Nobody wants claims to happen, but when they do, they are the moment of truth for customer relationships. The key is assessing claims accurately and paying them quickly. And this isn’t tech for tech’s sake; companies with innovative underwriting and claims platforms show greater market share and stronger year-over-year results.
The insurance industry has existed and thrived due to its ability to give coverage to customers to protect themselves against unprecedented risks. But it has never been more relevant to society than now, especially with an ongoing pandemic, global climate change and post-pandemic with so many more significant risks and constantly emerging threats. While the industry has responded well to the massive disruptions of 2020, insurers must seize the moment to engage more customers via richer digital experiences, higher-impact products and services, and more agile and dynamic operations and facilitate a safer and lower-risk environment for all.
Axcel Beck is a leading global insurance consulting and technology solutions provider specializing in digital transformation solutions powered by Guidewire, No-Code, and AI to optimize critical business processes and achieve exceptional results for insurers.
With insurance rapidly becoming the hotbed of digital innovation, insurers need to respond faster and smarter by embracing change and rethinking business models to move towards a compliant, secure, and digitally-enabled operating model to enhance customer, employee, partner, and other stakeholder experiences. Axcel Beck will help you discover new digital tools and capabilities that can help streamline new product development, digital experiences, and the transformation of the entire insurance business.
Our innovative and technology-led solutions empower insurance businesses to keep pace with an evolving marketplace, dealing with new regulations, digitalizing the customer experience, delivering innovative insurance tech solutions leading to business growth coupled with sustainability. As a frontrunner amongst insurance tech companies, we offer a wide range of services to cater to all business requirements.
We collaborate with insurers on technology transformation programs and the deployment of digital tools. From concept to implementation, we work with you to develop strategies that optimize performance, drive efficiency and enhance quality.