Our world is becoming increasingly digital, and consumers anticipate easier and more flexible user experiences in all their interactions. The explosion of insurtech startups implies that the future of insurance is significantly digital. Traditional insurance companies can either flourish by starting now to transform their legacy into digital tools or stay on the current course and watch their clients migrate to less experienced competitors who offer “easier” products.
Innovation in digital means faster, simpler, and scalable ways to offer your products to the general public. The faster, the simpler, and the more scalable you transform your offer; the more clients will be seen coming and staying with you. The opposite is also true.
The good news is that rapid changes in technology, channels, and business models present enormous opportunities for insurance companies to defend market share and enhance revenue and margins.
In the face of the COVID-19 pandemic, increasingly more consumers are looking towards providers with strong digital capabilities. A recent PWC survey claims that 41 percent of consumers are likely to switch their insurance company in favor of a more digitized one.
Innovation in Insurance: Latest Trends & Applications
Digital innovation in the insurance sector combines traditional insurance operations with state-of-the-art technology. Products range from artificial intelligence bots to app-based solutions. Read on to learn about the latest innovation trends.
1. How about Having a Legion of Robot Consultants working for you? Meet the Digital Advisors.
Meeting customers’ demands without any delays is a priority for businesses today. This is where AI-based chatbots and robo-advisors come in. Insurance companies that have not yet incorporated AI chatbots in their websites to provide 24/7 service should consider that the Morgan Stanley and BCG studies claim that insurance companies tend to provide poor customer experience. About 60 percent of insurance clients worldwide aren’t satisfied with their service providers, and nearly 50 percent of insurance clients consider turning to newer models.
Appropriately implemented applications can perform repetitive or routine insurance tasks that do not require human participation, such as collecting customer data and processing queries fast. The goal of proper AI/chatbot automation should be to offer almost human forms, having a robot do most repetitive tasks and freeing your client service to do well the share of tasks that, at least at this moment, only humans can do.
2. Internet of Things Is Simpler Than You Thought (If You Know How to Implement It)
The Internet of Things (IoT) expansion has been a game-changer for organizations and consumers alike.
This technology eliminates paper documents and the annoying delays induced by their physical exchange. Agents can analyze data immediately and handle new client forms, requests or claims within minutes. This also applies to reducing risks on underwriting. Furthermore, with networked devices, all departments can simultaneously access data, change premiums, and onboard new customers at any time.
IoT also enables you to provide your customers with specific, customized offers based on their preferences, which are likely to increase conversion rates and client satisfaction. Additionally, you can detect fraud and develop a more precise business system that relies on data and minimizes bias or manual mistakes.
3. Big Data and Machine Learning Is Not That Complicated
Big Data is significantly altering the insurance industry. With multiple internal and external data sources available, businesses utilize AI-enhanced prediction models to identify profitable trends and patterns.
Many insurance companies utilize big data and machine learning for pricing and underwriting. Some life and health insurance businesses even employ wearable devices to track customer behavior before writing a customized insurance policy.
Customer support, fraud detection, and claim processing operations can also benefit from AI bots taught to evaluate data streams in seconds and provide accurate responses.
4. Usage-Based Insurance – A Dream Come True?
Usage-based insurance (UBI), often known as telematics, allows insurers to set rates based on a client’s driving behavior.
For example, cars equipped with event trackers facilitate this procedure. Mileage, acceleration, airbag deployment, hard cornering, GPS coordinates, and other data are all recorded by the gadget. Because the pricing is now dependent on the individual’s actions, it is more equitable.
Insurance firms can benefit from implementing UBI technology into digital solutions by, for example, increasing the proportion of safe drivers they insure and decreasing the amount they pay out in claims.
Preparing for the Future Can Be Hard For Traditional Companies. And that’s Ok!
We live in a time of transition and transformation where traditional insurance models are no longer applicable as new ideas, competitors, working methods, and obstacles emerge.
Insurers are already under pressure to adjust. The next wave of macro and micro changes – global, local, industrial, and market-specific – will bring increasingly complex challenges that require proactive strategies. The insurance industry leaders must capitalize on the benefits of digital innovation and anticipate and adapt to evolving needs.
To add to this, tech prodigies prefer to join technology, consulting, or other financial companies rather than insurance… Insurance has a bad reputation for them. According to Deloitte, only 4 percent of millennials are interested in working in the industry. As a result, companies frequently don’t have enough technically skilled employees to follow changes, let alone drive them.
That’s Why I Launched Alfredus.co
My agency, Alfredus.co, recently nominated one of the top Digital Innovation Consultancy in the USA, helps our clients navigate the numerous changes of the new world, and win in the digital marketplace. The world is moving fast, and we help traditional companies stay at the forefront through innovative solutions and digital marketing. Get in touch today to learn how we can help you make the most of the present and prepare for the fast-arriving future.