(Image credit: Marwan Ahmed/Unsplash.)
Between navigating challenges like a pandemic, extreme natural disasters and a looming recession, insurers have learned they need to be flexible and resilient to keep pace in today’s competitive market. In fact, these disruptions likely will not slow down any time soon; when coupled with heightened customer expectations, industry leaders and carriers will continue to feel pressure to digitize their services to meet those expectations. In a recent survey from Gartner, 58 percent of insurance respondents reported that the pandemic sparked an increase in funding of digital innovation.
With the world rapidly changing, automation remains essential for insurers providing important benefits such as increased efficiency, enhanced security protection and empowered workers. With more insurers planning to build and invest in their digital evolutions, there are several key areas they must be aware of in the coming year.
- Customer experience will accelerate and drive priorities.
Insurers can no longer delay the adoption of technology that enables digitalization, specifically end-to-end automation. More insurers will look at internal-facing procedures when automating that ultimately improve the customer experience. Priority areas where insurers will likely continue to take action are:
- New business and underwriting: A newly submitted insurance application is often the first touchpoint between the insurer and the consumer. Any poor experience during the new business and underwriting process can create doubt with the consumer, who might start second-guessing their choice of insurer. A quality experience establishes a level of trust and creates a strong foundation going forward.
- Policy support and maintenance: In between the policy being issued and the payment of claims, the insurer must provide simple and easy ways for the agent and policyholder to stay engaged and manage their policy. Implementing internal tools and applications along with digital service channels is critical to maintaining a positive relationship between the insurer and their customers.
- First Notice of Loss (FNOL): The experience a consumer has when filing a claim is critically important to both the customer and the insurer. A poor experience creates frustration for the consumer who might decide to start exploring alternatives. A quality experience creates loyalty and increases customer satisfaction and renewal rates.
In addition, there’s a robust potential market for insurers to include Robotic Process Automation when digitizing their efforts. Designed to automate high-volume repetitive tasks so employees can focus on more strategic thinking and value-added work, it will become a game-changing technology and solution for the industry.
- Cloud-first strategies are here to stay.
Many insurers have embraced a cloud-first approach, allowing them to become more agile when adapting to industry trends. It’s expected that more risk-averse insurers will adopt this same mindset. Besides freeing themselves from managing software, insurers have access to new capabilities such as deep analytics which can enable carriers to develop better, personalized customer experiences.
- The growing ecosystem of complementary partner solutions continues.
Most core system vendors in the insurance industry are actively building an ecosystem of complementary partner solutions. These solutions extend the value and power of the core system to peripheral systems like Content Management and other capabilities. Vendors manage and operate a “marketplace” where technology partners can list complementary solutions that often come with pre-built, validated integrations. Being able to choose vendors and solutions that are part of a digital ecosystem saves time and costs for insurers when creating a connected technology environment.
- Wearables and Internet of Things (IoT) devices will keep impacting the value chain.
As the adoption of IoT devices increases, insurers have more access to data helping them reduce or even prevent large losses. For instance, a fitness watch’s ability to measure fitness and cardiovascular health will be key data points as insurers seek to quantify the appropriate rate for their customers. These devices can impact the industry’s recalculation of the entire value chain, from assessment to customer touchpoints and more.
- Artificial Intelligence (AI) will become increasingly prevalent.
More insurers are relying on AI to protect themselves from issues, specifically fraud. Although a highly regulated industry, AI allows carriers to identify patterns in data, and models and algorithms can be built to produce fraud identifiers and propensity scores. Additionally, AI can analyze massive amounts of claims for hidden relationships among fraudsters.
- The pressure for insurers to adapt and digitize their operations reigns on.
With more insurtech companies expected to enter the market, turning it into a highly competitive business environment, delivering a positive digital customer experience will be key for traditional insurers to differentiate themselves. To meet enhanced customer expectations, traditional insurers are increasingly cognizant of the need to provide fast, efficient services across all aspects of their businesses, which requires significant digital maturity and, even more importantly, a holistic strategy for their digital evolution.
Regardless of what stage insurers are at with their digital evolutions, ongoing and optimizing activities and processes are an ever-present concern as the market continues to change. While several factors may influence the industry, these predictions present opportunities that insurers can capitalize on to meet current challenges and prepare for what’s ahead.