Insurance Industry: Pushing for Digitization

The insurance industry is very competitive, even without considering the current technological developments. A new reality of digital awakening is setting in. The truth is, policyholders and clients have more information at their fingertips now.

 Major challenges facing insurance entities are;

1. Keeping up with the demand for enhanced customer experience
2. Broader scope of products and services, and
3. Fulfilling customer expectations through digital platforms

The pandemic compelled most insurance providers to accelerate their digital objectives. The progress is faster, especially in the UAE. It was the digital incentive that the industry needed to catch up with the other sectors.

The digitization process was boosted through the development of next-level operational models. It resulted in painless customer experiences, new business models, and increased revenue streams. Digital technology continues to change how insurance providers buy and sell their products.

 Benefits of Digitizing Insurance

Enhanced Customer Relationships on Multiple Channels

Before selecting an insurance policy, most people rely on online platforms for information. Their go-to options are social media pages, supplier websites, and review platforms. Insurance entities that use traditional methods to build customer relationships, such as agents, brokers, and call centres, are now leaning towards digital channels.

To ensure a smooth transition, insurance companies must implement changes gradually. There's a need for change in all areas - that is from production processes, products, and services. The goal is to enhance the customer experience throughout the buying process.

Improved Efficiency in Internal Operations

Digital customers now expect timely responses, enhanced experiences, and improved products. The result is a need for efficient internal processes and better infrastructure - it’s an efficient way to meet customers' expectations.

The insurance industry should align operations with changes in its customers' expectations. They should also understand how the changes affect the back-office procedures.

Advanced Data Analysis and Management

Digitization facilitates large-scale data processing and advanced data analysis. It enables insurance companies to improve productivity in a cost-effective manner.

Insurance providers can focus on the actual customer needs, lifestyles, and preferences. With this, they become more equipped to handle customers through multiple channels, enhancing the customer experience.

Ways of Digitizing Insurance

Digital Quoting Process

There are numerous online comparison platforms and insurance marketplaces. Insurance companies now collaborate with tech companies to provide digital quotes. The quote details depend on the customers' basic information.

 Insurance companies can now use artificial intelligence to make sure you get a fair and accurate quote. This approach improves the customer experience through fast, convenient, and accurate quotes.

Digital Purchases

Most people prefer consulting an insurance broker before purchasing a policy. In most cases, the customer has already researched the company before reaching out. So when customers cannot find the information they seek, they approach your competitor.

 Insurance entities need to complement human touch with technology to curb this challenge.

Digital Claims Process

Most Middle Eastern countries are enforcing a compulsory health insurance regime. The result is increasing medical malpractice claims against medical professionals and institutions.

The claims process is often hectic for most people, especially following an accident. Insurance providers with challenging procedures are likely to lose existing and potential customers.

Digitizing the claims process simplifies it for customers to access all stages online.

Insurance companies can develop apps for their agents and customers to enhance convenience. Customers have a better experience;

-         Renewing policies

-         Submitting claims

-         Requesting roadside assistance, and

-         Performing other relevant actions

Challenges of Insurance Digitization

Coordinating Multiple Systems

Most established insurance entities have existing processes. For efficiency, they follow protocol when storing data, developing policies, and settling claims. Implementing new digital strategies doesn’t get rid of the old systems.

One common challenge is how some existing customers might resist the changes. The major risk is them opting to terminate their business with the insurance company. Another challenge is to digitize crucial or sensitive historic data on claims.

The aim is to create a dedicated tech team, which is an additional cost to the insurance company.

The Need for User and In-house Training

Insurance companies should design simpler user interfaces.

Before introducing a change, insurance companies must train their customer service teams and they should have the relevant skills and information to assist customers before they can embrace the new interface.

Data Privacy and Security Challenges

The increasing frequency of cyberattacks has raised the challenge of data protection. Hackers can upload ransomware to cripple operations then demand payment. They can also cause data breaches that allow them to steal sensitive information.

Insurance companies need to protect their own data and systems from cyberattacks. Defining and following data management protocols are critical for security. However, it's also time-consuming and costly.

Limited Resources

Overcoming the challenges that come with digitization requires significant time and financial investment - from tech manpower to software developments. Insurance companies have to restructure their financial priorities to accommodate these needs.

Conclusion

Most insurance entities battle balancing investing in modern technology and the cost implications. It's important to remember that customers will not wait for companies to catch up. They simply move on to your competitors.

If the digital era is the evolution of business, then insurance companies must be able to cope with changes in the industry.