The insurance industry stands at the threshold of profound change. With a rise in digitalization, insurers have an incredible opportunity to drive more personalized offerings, reduce costs, and significantly boost competitiveness. While digital transformations can be disruptive, big data monetization, instant insurance, and digital competitors are proving to be critical game-changers. How can insurance companies digitally innovate and succeed in this new dynamic environment?
Disruption Drives Innovation
In 2020, insurers were forced to accelerate their plans for digital transformation by selling online, revamping user experiences, and reassembling supply chains. Those firms already in the process of updating their digital offerings were set to prosper during the pandemic. And those who were behind on digital trends struggled through the last year.
A recent Insurance Wire article states, “Insurance isn’t traditionally associated with innovation. It’s been around for hundreds of years, and it’s often seen as an essential protective measure. But, as with every sector, insurers need to shift and up their game or, inevitably, be disrupted and discomforted.”
Of the many innovation opportunities insurers face, three below stand out.
Shrinking margins and rising competition from fintechs and digital disruptors have pushed insurers to reinvent. One major reinvention is the transition to “instant insurance.” Customers are starting to expect this digital solution: products covered from the day of purchase with policies taking immediate effect–all manageable from their smart devices.
Instant insurance requires cloud adoption to match resource demand dynamically, while agile application tools boost dev-ops initiatives, leading to faster time-to-market deployment of new services. This allows insurers to be agile all while connecting their customers to new digital offerings on various smart devices (tablets, laptops, mobile, and more).
Streamlined Processes and Automated Decisions
Another key to insurance innovation is an outcome-based analytics approach that streamlines processes, detects anomalies, and automates decisions through tools like self-learning data science models and rules engines for claims. This approach helps manage and detect fraud, automates risk assessment and underwriting for faster claims processing, and reduces the costs associated with human errors.
This new digital world means insurers must capitalize on the mountains of data that separate them from newcomers. But this will only act as a competitive advantage if that data can be structured and analyzed. Automation is critical, and every action should pave the way to greater gains from artificial intelligence (AI), machine learning (ML), and big data.
Micro-targeting Customer Needs
A major challenge for insurers is understanding what customers want. Insurers need a consistent view of customers across their multiple business lines and disparate data systems. Applying insights from simple interactions like website visits, social media exchanges, and service chats is key to increasing customer intimacy.
These dialogues can be optimized through the use of AI and ML to immediately establish and react to customer concerns, needs, and desires. Customers who feel seen and understood will continue to return and will offer valuable word of mouth marketing in a sea of insurers.
Insurers can use AI and ML to find the best offerings for users; whether a new customer buying their first insurance product or existing customers who have been buying “all-in” packages for decades, AI and ML can learn what kind of customers prefers which kind of package. Automated segmentation and micro-segmentation will become decisive tools for marketers to anticipate customer needs.
Don’t Let Data Hold You Back
Are you one of the 95 percent of insurers who expect to increase the use of advanced analytics over the next three years? Or are you one of the 83 percent that rate themselves as ineffective in digital business strategies?This new digital world means insurers must capitalize on the mountains of data that separate them from newcomers. Click To Tweet
It’s time to get ahead of the competition. Insurers succeeding in 2021 know that trusted data infrastructure is the key to success and have prioritized data to gain access to their most valuable customers. This e-book describes how to gain and maintain leadership in the new digitalized insurance landscape by leveraging new technologies.