Trends in Insurance Technology Adoption
It can be difficult to predict the future, but there is no need to prepare for it. Insurers are grappling with the new and challenging business, investment and regulatory environment resulting from the financial crisis. However, the industry also faces broader challenges. Changing demographics, the growing power of emerging markets and changing customer behavior will help shape the long-term future of the industry.
Digital technology is a global megatrend that is changing various industries, including the insurance sector. The insurance industry is relatively slow to adopt IT due to rapid changes in technology and because their distribution channels are still conservative, i.e. run by agents and brokers and, in fact, are not yet ready. use new technologies. However, the adoption of digital technologies by customers, including social networks, smartphones, electronic transactions, etc., enabled by cloud services, e-commerce and mobility models, has an impact on the capacities technical and commercial aspects of numerous insurance companies. Insurers are eager to take advantage of this trend.
The factors that we believe are driving these changes can be categorized into:
Social: The balance of power shifts towards customers.
Technological: Advances in software and hardware that turn “big data” into actionable information.
Environment: The emergence of more sophisticated risk models and the shifting of risks to cope with the increasing severity and frequency of catastrophic events.
Economic: The rise of economic and political power in emerging markets.
Policy: Harmonization, standardization and globalization of the insurance market.
Key Business Drivers for IT Assurance Adoption:
Engage customers using multiple customer interaction channels and include all age segments
Design strategies to integrate growing investments in internet and mobile channel strategies for ever faster communication.
Work with partners to launch innovative products in areas such as microfinance, wealth management, etc.
Automate underwriting processes using data analytics and business intelligence (BI) and predict real-time fraud analysis, risk analysis.
Use Bancassurance banking systems and regulations available in each country to explore cross-selling of insurance products, especially in emerging markets such as India
While 63% of insurance companies say they are ready to move to more digital practices, only 23% of these companies are ready, reports a joint study by Forrester and Accenture. To accelerate this process and ensure a successful transition to digital workflows, we can expect insurers to embrace a few key areas as they seek to create more usable and automated processes.
Adopt on-premises and cloud-based infrastructure
Just two years ago, 84% of businesses operated in the cloud, and more than half of those businesses said the cloud reduced the workload of IT teams, PC World said. However, IT teams in the insurance industry are struggling to determine what information regulators allow to be stored via the cloud versus what is in place. To add to this, the proliferation of legacy technologies challenges the cloud-only approach. Many insurers use 40-year-old back-end technology designed to manage the claims process, according to a recent report by TrustMarque. This type of technology prevents change, but insurance agents are far from immediately replacing such technology in the mainframe.
This year, as the insurance industry embraces a more streamlined workflow, we can expect a significant increase in the use of technology that can be leveraged through the hybrid cloud and in select locations, ensuring flexibility maximum for customers and a strong adherence to the constant evolution of the government. regulations. in the insurance industry.
Automation of business processes as needed
The key to moving towards a more digital environment and improving customer service is.
While typical face-to-face interactions between insurance companies and their customers may be less common, relationships are still more important in other ways than in the past. As a result, insurance agents need more time to interact with their customers and less time to sort documents, scroll through documents, and track processing. complaints.
Choose programs and systems with customers in mind
A Forrester-Accenture report recently called this year the “age of the customer,” where customer experience is at the heart of the digital movement. This means that new digital technologies and processes cannot be implemented with a management-oriented mindset.
Take, for example, something as simple as a digital app. While some technologies may require three different phone numbers or two different emails from the customer, is it convenient for the customer completing the request? Customers now expect a smart and transparent process from insurance companies. While this may indicate some disruption to the agent’s internal processes, the result should be to make the programs easier to use for the customer, not just the IT team.
Social media analysis
Insurers have turned to social media as a marketing medium and collaboration platform. Social networks are widely used to network with friends and business partners. Smartphones and mobile devices make it easier to use social media. Insurers can target new customers based on life events and can also use social media to interact with internal and external stakeholders.
Focus on SaaS solutions
Insurance companies implement applications using SaaS solutions because they offer efficient infrastructure, high level of security and low risk. Insurance companies have the advantage of having access to the latest infrastructure and IT platforms at low cost. SaaS offers the perfect insurance solution to improve efficiency with minimal capital cost.
Real-time architectures for agility
Sources of real-time data are mobile technologies and social networks that insurance companies can leverage to become more competitive. Real-time data fetching from online channels is proving to be a gold mine for insurance companies as it provides insights into customer behavior based on insurance products integrated into the strategy . Insurance companies are implementing data analytics tools, BI platforms, and data visualization tools to take full advantage of real-time data.
Data analytics and big data
The ability to capture real-time data, big data and analytics plays an important role for insurers in terms of potential customers. A recent trend is the adoption of sensor technologies called telematics which are used to monitor an individual’s driving habits. These technologies help insurance companies provide usage-based insurance policies.
Information plays an important role in the insurance industry in terms of product pricing, development, risk management, claims handling and fraud detection. These functions can be performed by collecting data from multiple sources and using software tools to derive important insights from the data. In order to effectively implement insurance operations, the insurance industry needs to adopt computer systems, new technologies and new networks to capture real-time data and enhance its data storage capacity for data collection purposes. analysis to maximize the number of customers.