Technological advancements today are not only reflected in the way we interact and do business but also in the changing market dynamics. So, when it comes to businesses, while the early adopters of the upcoming technology have a natural competitive advantage, the risk of losing to your competition because of not considering technology as a part of one’s business strategy is historically proven.
While the market dynamics for the insurance industry may be different from any other industry, the rewards for the insurance companies that are adopting a digital technology driven strategy, are endless. Here’s a list of the rewards the insurance businesses can reap on embracing the digital revolution:
1) Personalization of Insurance Policies, Pricing & Risk Models
One of the key strategic goals of any insurance business is to achieve improved levels of accuracy at risk measurement and impart customized cover to the customers that fit the bill for the measured risk levels. Few would find the traditional premium pricing models and the disparity between the premium for policy renewal and new customers based on average risk profiling as justified. So, personalized risk assessment is the new and preferred way to go about insurance. With the advent of the technologies such as IoT (Internet of Things), the future belongs to highly personalized Insurance Policies that reflect our lifestyles, habits and digital/technology footprint & come with real-time pricing and risk models.
2) Omni-channel Customer Engagement Program
Adopting an omni-channel customer engagement program helps an insurer get a complete view of the customers across all channels of communication and this, therefore empowers them to deliver a seamless customer experience with an integrative approach to the multiple channels. So, right from mapping the lifecycle of a customer’s policy to analyzing their individual preferences to tailoring the products for them accordingly, it helps impart a personalized experience.
3) Streamlining of the Processes
While currently the insurers are extensively using the manual processes to fill the gaps, these are too slow to achieve an integrative approach & impart a seamless experience. Digitization will help streamline the processes to add a lot more efficiency to the otherwise slow process taking from days to weeks. This will help the insurers do away with the time-consuming and margin-restrictive manual processes and adopt a speedy process for accelerated turnaround times.
4) Business Model Innovation
With the new and more tech-savvy entrants in the market, it is common these days to come across the various ‘online only’ insurance offerings that redefine a personalized customer experience leveraging on a combination of digital services and cloud platforms. So, with digitization of your insurance business, you can get more freedom when it comes to exploring and innovating new business models.
5) Big Data & Data Analytics
With increasing connectivity across communication channels, the amount of useful data aggregated from all the channels is also exponentially increasing. In such a case, the insurance businesses are faced with the challenge to make sense out of this entire business data to get better hold of risk management with reduced fraudulent claims and ensure the delivery of targeted and more relevant offerings to the customers. Digitization serves to address to this issue using the Big Data and Data Analytics tools.
6) Acquisition of the New Markets
Digitization plays an important role for the insurance businesses to reach out to the emerging markets and extend their proven offering to the prospects in these markets who have recently grown richer and have started to feel the need for insurance for their valuable possessions for the first time. In this way digitization is giving way to a huge untapped market opportunity by empowering the insurance businesses to tap this new and emerging market potential.
To make the most of this opportunity, however, the insurance businesses must ensure that their digital strategy is designed in such a way as to go well with their existing business model and infrastructure as well as accommodate their future business strategy and goals. So, planning the digital strategy of your Insurance requires you to have a strong hold in your market as well as a deep insight into what is coming next in terms of technology. To add to it, are also the considerations of the challenges to be faced on the way of executing the digital strategy.
However, at the end of the day, with all these advantages awaiting at the other side of a successful execution of the digital strategy, the tedious process of planning is going to be worth the effort.
Having closely worked with one of the world’s largest insurer organizations, we at Carmatec, hold extensive experience and strong foothold in the insurance market. This combined with our technical prowess makes us particularly well-suited to handhold your Insurance business through its digital journey. Interested to know about our past projects in your industry and our approach? Contact us to know more.