It’s a brave new world out there and it’s critical to stay on the edge of innovative strides. Digital technology has changed everything, including the way forward-thinking insurance companies operate. That, in turn, has opened up new vistas of opportunity for insurers and their customers.
An exploration of the top trends in insurance and the industry’s technological breakthroughs starts with a basic definition.
What Is Digital Transformation in Insurance?
It’s the development and unveiling of a range of digital tools and technologies designed to enhance operational processes, streamline workflows, and improve overall customer satisfaction within the industry.
These digital tools and ways of doing business have become known as insurance technology, or simply insurtech.
Insurtech uses such tools as artificial intelligence, machine learning, blockchain-based systems, DataRadar, and other digital services your parents never heard of, much less your grandparents.
How Digitalization Is Changing Traditional Insurance Models
Digitalization is changing the landscape in big ways. It’s allowing the industry to work faster and more cost-efficiently and with greater customer satisfaction.
Taken together, the digital services create automation in insurance that streamlines and improves the ways the industry creates and markets products, assesses risk, accepts and processes claims, and enhances the insurance customer experience.
Even more change is on the way as AI in insurance becomes ever more advanced and other digital innovations in insurance come into play on an ongoing basis.
Key Technologies Driving Change
The ultimate goal of insurtech is to improve the experience for all industry stakeholders, from investors, company management, and agents to the policyholders that keep the engine running.
Here are some of the leading digital services and technological advancements that mark this industry transformation.
Artificial Intelligence and Machine Learning
Artificial intelligence, or AI, is a set of advanced digital technologies that enable machines to perform tasks associated with human capabilities and behaviors. This includes rational two-way communication, problem solving, learning, and reasoning.
AI in this sector encompasses technologies that improve various areas of the business. That includes streamlining what used to be a grueling claims processing procedure, analyzing data used to set rates, customizing insurance products, detecting claims fraud, and automating numerous other ways to save insurers time and money while enhancing customer satisfaction.
The way AI constantly improves results is based on its ability to learn from the data it absorbs. This process is known as machine learning. Through machine learning, the longer you use AI in insurance, the faster and more accurate its performance will be.
Cloud Computing and Big Data Analytics
We live in an age of information. That information comes in the form of bits of data. Digital innovation enables today’s insurance companies to gather and analyze large quantities of data to draw actionable conclusions in the real world.
This big data, once interpreted, can be used to assess risk, process claims, and enhance the customer experience and operational efficiency in numerous ways.
The cloud is, in effect, the workplace in which that data collection and analytics happens.
Customer Experience and Engagement
The customer is royalty in the insurance business. That’s the way it should be, and the digital transformation of insurance makes that a central point. All of today’s digital innovation leads to making interaction with the customer faster and easier.
But how is that accomplished? What’s different about how customers are served today compared to those ancient, pre-digital times? It happens in a number of ways, starting with the introduction.
Personalization Through Data Insights
You can learn a lot about your policyholders and prospective customers by collecting and analyzing data. Digital innovation allows you to learn what you need about their claims history, lifestyle, product preferences, needs, and budgets.
With this information, you can more accurately tailor and pitch products that more precisely meet their needs and are priced at rates they can afford. Everyone’s happy.
Omnichannel Service and Self-Service Portals
Success as an entrepreneur has always meant being there when your clients or customers need you, and being able to answer questions and provide services at their demand. That’s not always easy in a traditional enterprise, but the digital transformation of insurance makes contact on their terms an automated reality 24/7.
The new digital experience starts with multiple channels and methods of communication, from AI chatbots to phone, email, text, and social media. That could be for claims processing, billing questions, complaints, account management, or product shopping and rate comparisons.
The “agent,” in various forms, is always available, with answers and insights that are spot-on. This enhances brand loyalty and creates additional opportunities to cross-sell and upsell to a receptive policyholder.
Operational Efficiency and Automation
Whatever you can do faster, more accurately, and more efficiently saves you money, results in fewer errors, and makes you a hero to policyholders. The digital transformation of insurance makes a positive impact in multiple ways.
Streamlining Claims Processing
In the minds of your policyholders, insurance is just an abstract concept until your product is needed. When the collision occurs, the fire and smoke damage takes its toll, or the ambulance is called, reality sets in. The claim is filed, and your policyholder waits for a response.
Today’s insurtech can make the wait briefer, the response more timely, and your policyholder more satisfied, as well as sniffing out fraud.
Remember the omnichannel methods of communication? Your policyholder can immediately send photos of the damage and other documentation with their phones, getting the process rolling immediately.
Data can be crunched and decisions made in record time. AI does its part, reviewing the transaction for accuracy and fraud detection. Your policyholder gets a check cut faster, increasing brand loyalty and making them another valuable reference to friends and family.
Enhancing Underwriting and Predictive Analytics
Now there’s another term your grandparents (and parents, most likely) never heard of: predictive analytics. The simplest way to explain it as a concept is that it can predict the future by analyzing the past.
In insurance, predictive analytics is done through data analysis and statistical models built by the power of today’s machine learning. The insights generated can detect fraud, predict anticipated risk, and create efficiencies in claims processing.
Underwriters can, with the help of predictive analytics, design insurance products that meet customer demand at sustainable rates.
Find Out What Digital Services Can Do for Your Insurance Business
Technology is changing the insurance industry. It’s an exciting time, and one full of opportunities never envisioned just a few years ago.
If data is important in this digital transformation, digital integrity is crucial. That’s why, at Confie, we employ DataRadar technologies to maintain the integrity of the data we constantly accumulate, analyze, and implement. That’s just one of the digital services we offer.
As the nation’s leading providers of personal lines insurance coverage, we change with the times because we must in order to maintain that position of industry leadership.
We also have answers if you have questions about how you can digitally transform your own company. Or if you have observations, insights, or digital achievements to share.
Just pick up the phone and call us at (714) 252-2500. Or drop us a line. We love to talk insurance services, digital innovation, franchise and acquisition opportunities, and more.
