Technology is evolving rapidly, and many insurance companies have to keep up. The main priority of the insurance company today is profitable and sustainable growth, and for this the leading insurance companies are taking all possible measures to introduce innovative methods and the latest technologies to improve business processes and streamline old applications.
“Digital natives” are and will continue to dominate the workplace, with huge implications for agents and brokers seeking to interact with clients and grow their business. As the millennium generation matures and enters, purchasing power, digital and more automated ways of doing business will become a fundamental part of everyday work processes.
From the growth of mobile users and cloud technologies to social networking, Deloitte’s 2016 Technology Trends study for insurance agents explains that insurance agents finally understand the need to be more agile, efficient and affordable to serve today’s customers.
In addition to this there is a complex regulatory environment that continues to add more regulation to optimize the insurance sector. A recent Deloitte report notes that such rules no longer apply between state and federal entities, but are a hybrid of regulation by U.S. insurance companies and state governments to ensure the effectiveness and adherence to standard procedures of state and federal agencies.
As a result, insurance agents not only feel pressured to digitize their workflow, but also need to streamline business processes to make the cost of doing business more efficient and comply with these rules.
While 63% of insurance companies report they are ready to move to more digital practices, only 23% of those companies are ready, according to a joint study by Forrester and Accenture.
To speed up this process and ensure a successful transition to digital workflows, there are a few key trends that insurers should and should adopt.
Upgrade legacy systems to increase operational efficiency. Due to the fact that the activity is distributed over a geography that spans decades, insurance companies are slowing down outdated systems, outdated technology, leading to high maintenance costs. The proliferation of modern technologies, such as mobile and cloud computing, has changed the way organizations do business. Instead of being left behind, insurance companies have come to take advantage of the latest technology and upgrade their old platforms to increase operational efficiency given consumer flexibility.
The use of cloud and local infrastructure – IT teams in the insurance sector have struggled with what information regulators are allowed to store in the cloud compared to local. A recent TrustMarque report states that many insurance companies use 40 years of administration technology designed to manage the claims process, which hinders innovation. In addition, insurance agents are far from instantly replacing such mainframe technology.
As the insurance sector adopts a more streamlined workflow, we can expect a significant increase in the use of technologies that can be managed through hybrid cloud and on-premises, providing maximum flexibility for customers and strict adherence to ever-changing government regulations in the insurance environment.
Artificial Intelligence – Artificial Intelligence (AI) helps insurance companies develop systems that can perform tasks that previously required human intelligence and manual processing. With the advent of artificial intelligence in the insurance industry, insurance agents can now rely on sophisticated systems for the accuracy, efficiency and seamless automation of existing customer service, underwriting and claims processes. In the coming days, artificial intelligence will become more destructive and will be used to identify and assess emerging risks.
Blockchain – The insurance sector is also focused on Blockchain technology to empower the future. Thanks to a distributed accounting system, smart contracts and irresponsible capabilities, it can act as a common infrastructure that can transform multiple processes in the insurance value chain. This will not only simplify paperwork and improve verification, but will also help the insurance industry significantly reduce costs. It will also reduce cases of fraud with valuables. Some major life insurance players have already taken steps to experiment with blockchain-based solutions throughout the value chain. John Hancock, for example, evaluates the evidence for the concept of employee rewards.
Predictive Analytics with Machine Learning (ML) – Using predictive analytics with ML, insurance companies can unleash the power of intelligence to process complex variable data sources into relevant data for effective understanding. This would help them predict what might happen next and what the best solution should be. As for the insurance industry, customers are offered prognostic advice to facilitate 24-hour customer service.
Strong reliance on IoT and big data – the insurance sector – is a data-driven industry that generates countless data – both structured and unstructured. As such, insurance companies are counting on the Internet of Things to accumulate more and more information about their customers ’behavior.
Big data analytics helps insurers make important decisions based on analysis of accumulated data. For example, data accumulated from wearable medical devices allow insurers to monitor customer activity to offer discounts on healthy customer activities.
Switch to mobile to offer services on the go. With the growing use of smartphones in both developed and emerging economies, the insurance industry is steadily introducing mobility as part of its business strategy. With mobile apps, customers can easily request a policy quote, find an insurance agent, calculate a premium or retirement income, and store policy information. Insurers just can’t ignore the benefits that mobile apps give in building a brand. With the growth of Internet consumption through mobile phones, customers can get involved through social networks and various other ways of communication.
Offering Innovative and Personalized Services Through Digital Touchpoints – Customers in the insurance industry are driven by a variety of policies and their premiums, and the rate of disappearance is high as they have multiple options to choose from. To retain their customers and build deep relationships with customers, insurance companies invest in customer engagement activities using a variety of digital points of contact, such as the Internet, mobile, social media, email, etc. For example, insurers help customers develop and protect their assets such as homes, vehicles, wealth and health, usually in partnership with other service providers. Such digital services are provided through the development of a digital strategy.
Automate regulatory compliance requirements. Because insurance is a highly regulated industry, insurance companies need to incorporate regulatory compliance into their business processes. In addition, they must quickly maintain their processes under the new rules as they are adopted. Automating regulatory compliance helps insurance carriers gain immediate access to information, ensuring that processes are performed consistently, minimizing the risk of non-compliance. Automation also provides the necessary information for reports and documentation of a specific task performed. Modern systems facilitate regulatory automation, while allowing for changes in accordance with regulatory requirements compared to older systems.
These were a few trends that could be the catalyst for a more efficient insurance company and more customers.
It always makes more sense to spend a penny rather than a dollar, that is – focus more on satisfying and attracting more customers and leaving your worries to an IT managed service provider who understands your business and customer and has enough familiarity with the domain. Feel the same? Let us know, as we are one of the leading companies in the field of IT services dealing with the insurance sector.