Digital transformation has become an extensive part of every walk of life. You just need to take one look around you to find how digitization has facilitated several processes, saved businesses a lot of time and improved overall employee productivity.
Digital transformation has become all the rage in insurance, affecting processes from policy checking to customer retention. Besides, the COVID-19 pandemic has given insurers several mandates to increase their productivity, improve customer experience and reduce operating costs by up to 40%.
In this blog, we highlight some key digital transformations and trends in insurance that CIOs should know about
1. Remote Servicing
Remote servicing has become a necessity in the insurance sector. This has gained increased significance during the pandemic. Customers can now submit virtual claims from anywhere at any time. This works better than having to call an agent, being on hold, or waiting for an insurer to visit in person. Customers get faster service, and that makes things extremely convenient.
Supporting this model beyond the pandemic gives you a competitive edge in customer experience. Not just that, greater support for remote work increases staff productivity and will widen your talent pool in the future.
2. More Use Cases for RPA
Insurers will jump at any opportunity to automate their labor-intensive back-office tasks. This is why Robotic Process Automation (RPA) use cases are expanding.
Insurers have traditionally applied RPA mainly for claims processing. The pandemic has, however, put the spotlight on some other emerging use cases that insurers can embrace, including:
- Compliance: RPA eliminates the potential for human error during compliance tasks. Automating details like name screening and data validation will get rid of unnecessary compliance penalties that could end up costing your company millions of dollars.
- Policy Administration: RPA can automate things like policy cancellations, payouts and form registrations to help you cut costs.
CIOs should take the time to identify specific opportunities for RPA to automate processes and improve the processes followed in legacy systems. The technology is available. All you need to do is put plans in place, to make it work according to your infrastructure.
3. Insurance APIs Create More Growth Opportunities
Insurance APIs make it far easier to work around the complex manual processes and legacy systems that have held digital transformation back. In the wake of the pandemic, APIs have given insurers new ways to capture business while also cutting back-end costs.
Most early use cases for insurance APIs revolve around usage-based models. But there are other opportunities for API-driven digital transformation that can drive premium growth, improve customer engagement, and cut costs:
- Claims Processing: Third-party APIs will give insurers access to real-time data, creating opportunities for higher customer value. Auto insurers, for instance, can use third-party APIs to access GPS data and track driving behavior more closely. Using this real-time information, you can prefill virtual claims if there has been an accident or break-in.
- Risk Evaluation: External APIs give underwriters a larger pool of data to analyze during risk evaluation. When we have the right analysis tools and automation in place, this extra data can increase both the speed and accuracy of the underwriting processes.
- Ecosystem Distribution: APIs form the backbone of ecosystem partnerships and give you new avenues for connecting with potential customers. By building APIs that integrate with partner platforms, your products can become add-on offerings for separate purchase.
CIOs should focus on creating API strategies that break down the silos in IT infrastructure that can slow down future digital transformation projects.
4. InsurTech Partnerships Are Accelerating Digital Transformation
Building partnerships with InsurTechs is a low-risk way to speed up digital transformation. Instead of investing all your resources in the long, tedious process of developing new products and services, you can integrate with InsurTechs that already offer the services or experiences your customers need.
Traditional insurers have typically viewed InsurTechs as threats. However, since the pandemic, InsurTech partnership models have started streamlining digital transformation initiatives.
CIOs should monitor the market for potential InsurTech partners that will fit into their overall digital transformation goals.
5. Personalized Pricing Leading to Improved Customer Satisfaction
Customers are always looking for a bargain and the best price. Personalized pricing helps insurers maximize customer satisfaction and reduce churn. Personalizing policies ensures that you’re always providing the most competitive price.
A survey from Bain & Company found that more customers have been switching insurance providers to avail of lower prices during the pandemic than in the past.
Taking a more innovative approach to pricing can give you a competitive edge in the insurance market. For CIOs, this means creating a data infrastructure that enables AI-powered systems to generate more personalized policies.
Exdion is a leading digital transformation company that has been helping insurance agencies automate and re-engineer their policy life cycle. Exdion offers the latest InsurTech solutions to help insurance agencies and brokers reduce operational risk, save time and reduce costs. Get in touch with our experts to digitally transform your manual insurance processes.