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The Digital World Propels Insurance Companies to Re-Evaluate Their Operations!
This is 2020-A year which is recognized as the year of digitalization and modernization. At present, almost every industry of the world has gone digital, be it regarding their approach for internal processes, competition, or customer service, and the insurance industry is not excluded from this.
Insurers are realizing the need for digital solutions to meet the ever-increasing customer demand for enhanced service quality. Insurers need to understand that it is the quality in the service only which the customers want, and this is the only reason they do not mind paying a little extra. So, let’s get started and throw some light on how digitalization is refining and redefining the insurance industry.
What is Digital Transformation?
Digital transformation refers to incorporating the use of technology to augment the execution of processes, increase operational capabilities, and enhance customer engagement.
Impact of Digitalization on the Following:
Automating back-office tasks helps increase performance and accuracy, along with completing high volumes of work in a short span of time. With the collaboration of analytics and automation, insurers can cut loss-adjustment costs, enhance fraud detection, refine claims processes, and eliminate the manual interactions.
Growing Demand of a Scalable and Agile IT Infrastructure
There are multiple benefits associated with bringing technology and infrastructure together. Collaborating existing models with modern software not only helps insurers and brokers but enhances customer engagement digitally, reading to a high acquisition and retention rate.
Middle Office Analytics
Through analytics, insurers can know about the previous patterns related to the customer lifecycle, customer demands, along with assessing risks in a better way to have the underwriting edge. Techniques for advanced analytics like Gradient Boosting Model (GBM) and logistic regression can help recognize possible fraud cases at the First Notice of Loss (FNOL).
Physical channels will be replaced and augmented by digital channels. Most of the physical activities will be replaced by digital approaches. This includes servicing, customer feedback/solutions, claims handling/management/, policy renewals, purchase/pre-purchase, and payments.
The Digital Transformation Phases
There are different phases of digital transformation that every insurance firm goes through. This includes assessing the current infrastructure, systems, and situations to plan for the movement of physical processes into the digital landscape. There are three major digital transformation phases which insurers go through:
This phase includes the realization of the benefits associated with digital transformation and its potential in the future. During this phase, insurers look forward to automating their processes and calibrating their business models to meet specific customer and business requirements.
During this stage, insurers incorporate the use of advanced digital technologies. With the use of enterprise portal solutions, they integrate the latest industry trends for rapid product launch and development.
This phase includes working towards future goals and trying to come up with solutions using NextGen technologies through the analysis of innovative products and integrated systems that have the potential of transforming the experience of every stakeholder.
Key Positive Digital Transformation Outcomes
1. Enhanced Efficiency
One of the biggest positives associated with digital transformation is its ability to enhance the efficiency of not only the overall processes but the insurers as well. With the help of artificial intelligence, machine learning, and advanced analytics, insurers are able to spot their mistakes, learn from them, and adopt new methodologies to get rid of them completely.
Claims processing through apps, live chats and digital assistants to enhance customer communication, faster policy writing through machine learning, etc., are some examples of increased efficiency.
Customers today demand a personalized service from the insurers. They want insurers to address their individual needs and offer policies and solutions that best suit their budget and lifestyle. Through machine learning and artificial intelligence, insurers are able to provide a smooth, personalized experience to brokers and customers.
Brokers can receive the entire information and process the same under one system, with customers having the option of viewing policies, filing claims, and paying bills through an app.
Instant customer feedback helps brokers to provide them with immediate solutions. AI systems and robust data analytics can modify marketing strategies to target audiences through social media to expand their reach, understand customer demands and behavior in-depth, and provide more personalized solutions.
Digitalization is helping insurers at large when it comes to scalability with respect to both backend and frontend operations. Insurers have definitely become more flexible when it comes to meeting customer demands.
They are able to offer services to customers anywhere via apps and self-service dashboards after collecting valuable data through IoT-enabled wearables and devices. This also helps insurers and brokers in making precise decisions on new product offerings, insurance policy administration, underwriting, and more.
Through technology, insurers are preparing themselves for meeting the current and future customer demands in a timely, accurate, and efficient manner. In the future, customer expectations are likely to evolve and become more demanding, but the technology will be refined accordingly to meet such demands.
The platform which has been laid down by predictive analytics, machine learning, blockchain data, AI, and data analytics, will help insurers adjust to the new technological advancements in order to serve the customers proficiently.
In a nutshell, digitalization comes with the following benefits for both customers as well as insurers:
- Faster access to insurance services and products
- Getting prepared for the future market and customer demands
- Enhanced customer service and operational efficiencies through automation, artificial intelligence, machine learning, etc
- A perfect platform for scalability and growth
- Self-service dashboards for customers to decrypt and compare complex insurance policies, understand the changing rates, and select the best plans.
- Personalized solutions to the customers
- Predictive analytical insights for making significant business decisions
- Synchronized processes for increasing productivity, sales, and profits
- Reduced time and cost in insurance business operations
Role of Technology in Helping Insurers Amidst Crisis
Technology plays a vital role in the life of insurers amidst crisis when it comes to offering uninterrupted services to customers. We all know about the current worldwide health crisis, which is going through due to COVID-19.
During such times, digital technologies help insurers use online platforms like cloud technology to store, compute, and process information and use tools like video calling and co-authoring to connect with their clients seamlessly.
Insurance employees are able to work remotely using digital tools like Microsoft Teams, Zoom, Cisco Webex Teams, Slack, GoToMeeting, and more. However, due to lockdown, additional challenges arise for insurers in the form of equipment and staff shortage since not every employee has a technical setup at home.
In such a situation, outsourcing insurance back-office processes is a viable option since it lets insurers gain access to technology and an expert team, lowering their workload at the same time.
Digitalization has definitely refined the insurance processes, and it will continue to do so in the future as well. It is not just the insurers who benefit from digitalization but customers as well who are looking for enhanced service quality and personalization.
During worldwide crises like coronavirus, technology and outsourcing are the best options for insurers to provide continuous services to their customers.
However, investing in technology for remote workers is not recommended as it can prove to be pretty expensive. On the other hand, insurance business process outsourcing provides you with the same benefits at a much lower cost.
In case you are looking for a renowned outsourcing expert that provides proficient insurance back-office solutions, you may consider contacting Cogneesol. It has been providing top-notch services to insurers worldwide for the last 12 years. Get in touch now to start your 14-day free trial to assess its potential and service quality.
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