Digital Transformation for Insurance: Future Defining Trends
Digital transformation strategy is on the mind of insurance companies. Almost every insurance executive working in the industry expects digital transformation to be a key part of business development in the coming years.
It’s a small wonder why.
The COVID-19 pandemic has hit the insurance sector hard. Reuters reports on insurers facing a sharp rise in payouts due to an impending recession, at a time when investment and asset acquisition is at an all-time low.
The advantages of digital transformation are well documented. Changes to process as a result of introducing new technology can increase productivity and lower costs — two factors that have never been so important for insurers.
But how does this translate to the sector in real terms? This article explores digital transformation for the insurance companies, and the trends driving change in the industry.
Great customer experience can drive sales. It boosts customer retention, inspires referrals and encourages clients to spend more on your business. Any strategy that insurers can deploy to improve engagement with their consumers is going to be beneficial. This means a lot of the ideas behind digital transformation in insurance gear towards better client relations.
Digital transformation for the consumer means one thing: a simpler and easier life.
Technology is in our homes, it’s on our phones, and it’s baked into our day-to-day lifestyle. Digital transformation for insurance is about taking advantage of the technology consumers already use to make it easier for them to engage with your business.
An example of this is through bespoke software tools and mobile applications that allow the consumer to access an insurance business from their mobile. They could manage their insurance policies on an online portal, or submit information about claims on a simply designed platform. Many insurers still use archaic paper-based submission methods for their claims systems, slowing operations down and making it more difficult for their customers to work with them.
Digital transformation can change how insurers handle their customer processes for a more satisfying experience.
As we’ve already highlighted, many insurance businesses struggle with the continued use of legacy systems. Entrenched paper-based processes and IT setups lacking flexibility are common, but not the kinds of systems equipped to provide adaptability.
As COVID-19 has shown the world, you need to be agile. Unprecedented circumstances, however rare, do occur. The outbreak demonstrates just how easily business landscapes can shift. While an extreme example, this crisis does show us just how easily changes in trends can impact consumer interest in your business.
The insurance industry is looking for digital transformation to secure greater levels of adaptability. Legacy systems are tough to evolve and update, while digital systems are much more flexible when implementing changes.
As a basic example, let’s say you offer a service that relies on a series of template documents. You want to change something within this service to make it better or meet market demand, but to do so would mean a massive overhaul of your internal IT systems so everyone can access the new template documents. In a nightmare scenario, it would mean sending out new templates to every computer or user on your system and deleting old templates, so you don’t accidentally send the wrong file.
This situation is a major barrier and may stop you from making important changes.
But if digital transformation strategy was incorporated, these documents could be moved and housed on a central cloud-based system. Rather than existing separately for all users, there would be one copy, accessed and repurposed for every task required. Changes to the template could be made live, which would mean the document could be adapted instantly to meet changing demands with no concern about complete overhauls of your network.
Remote Team Access
COVID-19 has created the greatest demand for remote working we’ve ever seen. Even following the pandemic, it’s expected that nearly half of the workforce will stay as remote workers — at least for the foreseeable future.
Even before the pandemic, however, remote work was on the rise. From improved employee retention to reduced business costs, there are plenty of reasons to consider remote working as a positive force for change in your business.
But remote work is a challenge for many insurance companies in their current form. With large teams and entrenched internal structures, moving to a more flexible remote lifestyle is a significant barrier. Despite the challenges, this is a barrier that must be overcome. The demand and necessity of remote work cannot be ignored for insurance companies seeking to secure their future.
Digital transformation is the clear-cut answer.
Cloud-technology is an easy answer to the problem. By ditching internal IT structures built on local servers and specific in-house hardware, cloud-based technology allows work to be carried out from any device with an internet connection through online portals. From communication tools to industry-specific software, cloud technology lets your team get on with their job from anywhere. Tools like time-logging software and work efficiency trackers also provide answers to concerns over work completion and productivity.
Cloud-technology is anticipated to be the biggest and most influential player in the next few years for digital transformation in insurance.
Want to get a more detailed understanding of what digital transformation could look like for your business? Logican are software design experts, specialising in claims management software. We’ve developed a series of resources that take an in-depth look at digital transformation.
Don’t miss our blog on digital transformation examples.