Why The Insurance Industry Is Embracing Business Transformation
The insurance industry has been slow to adopt full digitization, but the time is now for industry leaders to take a giant step forward and begin to reap the benefits of business transformation.
Consumers are demanding more from their insurers across the board, regulatory agencies are tightening parameters under which insurance companies operate, and the digital landscape is forcing the insurance sector to evolve.
What Business Transformation Means for the Insurance Industry
Digital enterprise drives business transformation across industries. For insurance, this means:
Providing consumers with access that spans devices and locations
Insurance policyholders expect the ability to conduct all of their insurance transactions via their mobile devices, including:
Shopping for policies
Comparing insurance products
Uploading key documents
Receiving notifications and reminders
A seamless experience across devices is key to keeping customers happy with their insurance product experience. Insurance companies who commit to business transformation are now:
Meeting stakeholder expectations with financial performance reporting
Stakeholders are done with paper printouts and clumsy metrics. Modern insurance companies need to be able to deliver reports in digital format, with easy-to-understand graphs and highlighted key performance indicators (KPIs, presented in a logical format on a conference room screen or personal computer monitor or device.
Facing business challenges with the help of predictive analytics
Insurance is becoming increasingly competitive, as traditional banks seek to push back against encroaching fintech by adding additional products to their lineup. These products are increasingly insurance-related in nature, and are providing a challenge to insurance enterprises. By using predictive analytics, insurance companies can leverage deeper knowledge of the industry and audience to plan targeted campaigns and develop new, innovative products and services to increase revenues and meet changing consumer needs.
Implementing automation for core business operations
Human labor is one of the most expensive parts of any insurance company, and the most prone to error. By taking repetitive tasks off the plate of high-value employees, you allow them to focus on insurance customers instead of data entry. Automating processes can drive business transformation, increase accuracy and efficiency, and help employees be more productive while pleasing more customers.
Improving processes for faster, more accurate underwriting and claims
Using artificial intelligence and machine learning can help speed underwriting, improve customer experience during the claim-filing process, reduce fraud, and deliver more satisfactory customer experiences. When all processes in your company are being enhanced by business transformation, you can increase sales, productivity and profits across the board.
Insurers See Positive Results From Business Transformation
According to an insurance industry outlook survey by Deloitte, transformation is underway and starting to show results for many insurers:
Around 70% of insurers have already started implementing various digital strategies to drive business transformation
Overall, there has been a 30% improvement in underwriting processes when the process is moved wholly online
Net income increased by 45% year-over-year, while EBITDA improved by 28%, on average, across the industry
Early adopters of digitization have enjoyed faster-to-market access for insurance products and services, and generated critical business insights for more informed decision-making. They have also integrated advanced digitized design and systems to enhance customer experiences, and reduced cost and time investment in their business operations.
Best Next Actions for Insurers
It’s vital to adapt quickly and continue chasing business transformation even as the insurance industry is changing just as rapidly. Be prepared to face challenges on multiple fronts, both external and internal.
The importance of omnichannel commitment
Modern consumers engage with all types of companies on multiple channels (avenues of contact/communication), from phone to email to social media. Their interaction with insurance companies is expected to be similar. They want to be able to research, recommend, share and make purchase decisions on applications that allow them to move seamlessly from channel to channel.
As part of business transformation, insurers need to drive customer engagement at multiple levels, allowing customers to engage with limited human interaction when possible. Self-service options supported by natural language processing and machine learning can help you create customer journeys that ultimately raise satisfaction scores.
Integrating your company profiles or pages on social media with your website and phone or email options makes it easier for customers to reach you through the means they are most comfortable with. Chatbots can be installed on Facebook to support self service, with a click to call or live agent chat interface option if their problem or question is more complex.
You can use inbound data from campaigns on social media or email to build clear consumer profiles. Learn to leverage AI-driven analytics to understand customer behavior and help them make informed purchase decisions. Finally, integrate interactive design elements to provide a seamless insurance shopping experience.
Regulatory and security concerns
As your insurance enterprise embraces business transformation, you will need infrastructure in place to support your policies and governance processes, making and enforcing clear rules for every product and policy to comply with applicable legislation.
Cybersecurity is both a practical business protection, a reputational concern, and yet another area of regulatory compliance that must be a priority. Your integrations and digital initiatives must be in accordance with data privacy and protection laws, sometimes in multiple regions.
Using Business Transformation to Drive Growth
Insurance companies must comprehensively assess their current markets, systems and infrastructure to prioritize investments and build digital workplaces that will serve future needs. According to Deloitte, what consumers want from insurers is changing quickly, and being able to stay abreast of trends is critical.
Three out of five insurers surveyed believe that consumers look at non-insurance products as the most important factor when choosing an insurer, and nearly the same number believe they are providing an adequate range of non-insurance products and services.
When it comes to ensuring customer loyalty, more than half of insurers surveyed think access to friendly, knowledgeable staff for assistance is most important, but barely a third think they are providing that level of customer care.
Embracing business transformation options like predictive analytics that help identify consumer needs and develop products and services to offer is one priority. Leveraging other aspects of business transformation like AI and automation to free up staff for customer service-related tasks is another.
Business transformation as a revenue driver can be embodied both as an approach and a strategy. To learn more about how ECI can help you identify opportunities and leverage business transformation to drive growth, contact us today.