The insurance industry has been embracing digital transformation in varying degrees for several years. We’ve seen alternative business models beginning to emerge and a blurring of the lines between the traditional segmentation of insurers, brokers and managing general agents.
The move towards digital self-service has been partly driven by a desire to improve customer service, provide insurance customers with an experience they are used to getting from other industries and partly to take advantage of the opportunities to reduce operating costs.
Customers have come to expect the insurer to already know basic profile information, to be able to make changes themselves and to do it all online or via an app. In fact, the less they have to do, the more they like it. In Denmark, for instance, if you want to buy a new policy with a new company, they will send the whole transaction to the old company, which will cancel your old policy, retrieve the data and pass it to the new insurer. There is no paperwork and it’s an entirely seamless experience for the customer. That is what people increasingly expect. We believe this will become a standard approach for more traditional insurance markets soon.
To be a next-generation digital insurer means you embrace agile and open digital systems, on the cloud and provide a seamless customer-centric experience.
If June Doe wants a quote for car insurance, she can go online to buy one. She easily types in her car registration number and ID number. Powerful automation tools then get to work, pulling enough information from the various registries to give June an instant quote. She purchases the insurance and is happy it only took her a few minutes of her precious time.
June’s experience is much better than the painful experience of answering a whole load of questions, information the company should already have, to get a quote. This grueling process can cause customers to abandon their purchase and look for a better customer experience. Luckily, today this is possible.
The right technology infrastructure needs to be in place to achieve these sorts of enhanced experiences for customers. To provide a true customer-centric experience, insurance companies need to do the following:
Another important parameter is the ability of the core insurance systems to provide the necessary data and integration in a granular and effective manner that fits into the new landscape. This requires cloud-based systems for efficiency alongside APIs, which are seen by many as the ‘new gold’. Cloud is vital and not just for its powerful applications and automation, or even cost-savings, but also for the data. Insurers are, naturally, wary of data breaches, so cloud provides crucial security too. Microsoft Azure and Amazon Web Services, for example, are among the biggest investors in cybersecurity.
Insurers must adapt to a new mentality, mindset and approach. To avoid being squeezed out of certain areas, both by disruptive startups and cross-industry entrances, it’s crucial that they are innovating and improving their offerings all the time and across the organisation.
Alex Zuckerman, Chief Marketing Officer & Chief of Corporate Strategy, Sapiens.
*Blog originally published here.