Digital transformation empowers insurance companies in an era of change.
The insurance industry is in the midst of digital transformation, with insurance providers attempting to apply new technology and modern ways of doing business to an industry that is both tightly regulated and reluctant to change. Many within the industry may experience a slowdown in their adoption of new technologies.
The industry needs technology that can empower insurers to meet the everyday needs of customers as quickly as possible—technology that's dependable, secure, and flexible. To embrace the right technology, and ultimately embrace change, insurance providers must better understand both what is stalling digital transformation and how modern technology can help.
Why Does the Insurance Industry Need Digital Transformation?
As discussed by McKinsey, the insurance industry is one of the last to undergo large-scale digital transformation, as insurance companies have been largely insulated against potential disruption. This is due to government regulation, the complexity of the services offered, large capital requirements for being a major member of the industry, complex business networks, and a wide array of policies that need to be reviewed during every procedure. Together, these elements have long prevented upstart companies from entering the industry and from fast adoption of new technology suddenly changing the way business is commonly done.
However, the continuing advancements made via digital transformation in other industries have now come to the insurance industry. As companies around the world create modern digital experiences and allow customers to shape online services around their individual needs, customers within the insurance industry begin to expect a similar level of service to what they experience elsewhere.
The biggest cause of digital transformation in the industry is that insurance is based on customer self-service, which is supported by highly trained employees. Today, modern customers expect digital services that match the precedent set by companies like Amazon and are growing increasingly dissatisfied with experiences that don't meet that bar.
An increase in customer satisfaction isn't the only outcome of matching customer expectations through digital transformation, however. According to Forbes, process automation enabled by insurance digital transformation can result in up to a 65% reduction in costs.
How Modern Technology Is Speeding Up Insurance
Today, insurance providers around the world wonder what role insurance technology will play in either helping or hindering their standing in the industry. Most new InsurTech applications are created to enable, and not undermine, insurers, but even so, they're seen as a disruption.
A well-run company should be able to execute in any industry by acquiring and retaining customers. Any company looking to embrace digital transformation will require effective tools and a trained team to perform well no matter the industry. The effects of digital transformation within the insurance industry are not the new cause of giant disruption, but the evolution of and continued growth within technology used throughout the industry. Companies seeking to grow and meet modern customer expectations will use these new tools to empower their workforces and long-term business strategies in ways that were not possible beforehand.
Today, brokers are beginning to gain access to data and tools that big insurance companies have had for much longer thanks to the increased accessibility of such solutions. Brokers are attempting to leverage analytics to determine the best and longest-lasting acquisitions for substantial financial gains. However, the vast amount of data being generated by customers and prospects needs to be managed and utilized through predictive analytics to create personalized insurance package services, which both individuals and organizations expect in the modern age of insurance.
As a whole, modern insurance companies have made great strides in analytics and have begun applying omnichannel experiences to their online presence. However, most are very early in applying deep customer insights to the data they have collected to create more effective customer experiences.
These new challenges and opportunities mean that insurance providers of all sizes can innovate in exciting, meaningful ways that empower employees and better reach target audiences. Together, they make digital transformation in the insurance industry not just a priority, but a meaningful next step for companies around the world.
