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Innovating and Evolving – How Insurers are Beating Disruptions
This Decade is Fast Turning Out to be the ‘Decade of Disruptions’.
2020 started with the COVID-19 pandemic that caused unprecedented disruption to lives and economies globally. Governments worldwide implemented unparallel fiscal measures to support their economies including stimulus packages and financial aid programs. And yet, the road to recovery remains challenging, with long-lasting implications for employment, income inequality, and economic growth. Soon after, geopolitical tensions took over and continue to shape the global landscape with respect to stability, trade, and diplomatic relations. Then there are the extreme weather events like hurricanes, cyclones, droughts, floods, and wildfires that are causing significant damage to ecosystems, infrastructure, and human lives. Even as the world has been grappling with these disruptions, a fourth one has hit us – the openAI – bringing forth risks of misinformation, deepfakes, bias, discrimination, ethical dilemmas, and the concentration of power.
Has the Insurance Industry Been Hit by These Disruptions?
Yes. The impact has been significant.
When the pandemic raged, insurers faced challenges of managing and processing the high volume of claims related to business interruptions, travel cancellations, event disruptions, and healthcare expenses. Even with the pandemic ebbing now, insurers are still struggling with increased costs, deeply strained margins, and significant financial stress on the industry.
In addition, the ongoing Russia-Ukraine faceoff, and the US-China tensions have affected the ability of insurers to underwrite policies, curbed access to certain markets, which in turn is leading to higher premiums and reduced coverage options to the public and business houses.
Climate extremes, on their part, have brought in their spate increased claims, changing risk profiles, higher loss ratios, uncertainty, volatility, and massive regulatory changes.
And now, with the emergence of AI technology like OpenAI, there is increased uncertainty with respect to job certainty, and increased fears of data privacy, security, and ethical concerns.
Insurance industry is at the crossroads. It must navigate these insurance industry disruption and find innovative ways to adapt and provide reliable coverage in an evolving landscape.
The Question is ‘How’?
- By embracing digital transformation – Digital transformation is no longer an option. It is an imperative. While most big insurers have already shifted to automated underwriting processes, digital claims handling, online self-service options for customers, many others are using digital tools to set their operations in order, improve productivity and efficiency, and enhance customer experience.
- By harnessing data analytics, machine learning, AI and blockchain – This is revolutionizing the industry with customer insights, that is in turn leading to improved risk assessment, better detection of fraudulent activities, personalization of products and offerings, better pricing, and increased customer engagement through user-friendly interfaces, simplified policy language, faster claims settlement, prompt support and self-service options.
- By collaborating with Insurtechs – This gives them muscle power to access innovative technologies, expand product offerings, and explore new markets. Furthermore, insurers can operate on optimal tech outlays by not having to make huge capital expenditures in building inhouse tech capabilities.
- By reaching out for ecosystem partnerships – AI and ML have brought about possibilities for cross-industry collaborations. Insurers are exploring synergies with tech companies, healthcare providers, and other industries to create innovative insurance products, such as parametric insurance for weather-related risks or cyber insurance for data breaches.
- By anticipating new emerging risks — Climate change, cybersecurity, and other evolving challenges are keeping insurers on their toes necessitating new coverage options and risk management solutions on-the-go.
- By adapting to regulatory changes and compliance requirements — Insurers are strengthening their data governance practices, implementing robust data privacy measures to comply with data protection regulations, engaging with regulators to shape policy frameworks, even investing in regulatory technology to navigate regulatory complexities in an evolving regulatory landscape.
Beat Insurance Industry Disruption with Insurance BPO
As has been established, trying to build every capability in-house and making massive capital expenditures in its spate is a practice of the past. Today’s times require organizations to be lean, and strong in their core competencies, with built-in flexibility and agility to take advantage of changing market conditions, and evolve almost instantaneously and continuously. This is why outsourcing is a good strategic move.
Cogneesol has been a leading business process management organization offering end-to-end insurance services to clients across the globe. Through the last sixteen years, we have been assisting insurers in various aspects of their operations including policy administration, underwriting, claims management, new business set-up, customer support etc. Through these years, Cogneesol has augmented its domain and technology capabilities so that it can offer its clients best-in-class solutions. With our global reach, Cogneesol possesses deep industry knowledge, experience and understanding to navigate diverse regulatory environments and to address unique requirements of different markets.
We offer to be your partner-of-choice as you endeavor to beat insurance industry disruption on one hand, and expand operations or enter new geographic regions on the other.
Get in touch with us at [email protected] or you can call us at 833 313 3143 for an overview of our efficient and cost-effective solutions coupled with technology enablements that can strengthen your business functions while keeping you nimble-footed to navigate the dynamic landscape of the insurance industry. Our experienced team is ready to collaborate with you, understand your unique requirements and deliver tailored strategies for the most effective business outcomes.
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