Digital Disruptions in Global Insurance Market
The 90s and the early decade of the millennium was still seeing discrepancies in digital adoption among insurance companies. However, over the past decade, disruptive digital inclinations across insurance companies globally, has brought in a high-tech uniformity of sorts.This digital adoption uniformity has also caused gradual waning of competitive borders among insurance firms. Key insurance functions to be mandatorily digitized by every insurance firm across the globe include risk management, insurance underwritings, costing, product portfolio distribution etc.
However, there have been several budding revolutionary digital disruptions within the insurance domain. These digital changes are positively prompting insurance companies to consider even restructuring their existing operational models.
Advanced digitization of insurance processes
Process and operational automations are gradually becoming a norm in many insurance functional areas, over a couple of decades now. Shortcomings in the past has been, the risks involved in implementing these process automations. Such constrains include high expenditure and imperative risks of process and system implementations.
Wielding the power of RPA
Technical and business experts across the insurance industry are now vouching on advanced Robotic Process Automation (RPA). RPA is the most advanced risk averting technologies, for insurance experts to leverage and to churn out the most productive, optimal cost insurance business.
RPA utilities in insurance areas
Along with AI and cognitive technology implementations, some of the complex and vital operations that RPA seamlessly tackles is:
- Simplifying redundant insurance administrative functions as well as transactions, which require strict protocols to be adhered to. RPA streamlines such complex tasks with no intervention needed by strategic decision makers.
- Optimizing on operational costs: RPA implementations are rendering improved quality and swiftness to insurance operations, thus drastically optimizing on cost of operations.
Insurance areas and illustrations of RPA implementation
According to a recent McKinsey report, Enterprises run high advantages of literally doubling their profits through RPA implementations coupled with a 30% reduction in claims costs.
- Underwriting and newer business pastures
- Processing of Claims
- Analytics based business processes
- Complete automation of manual data entry
- Constructively put to use Legacy Applications
- Automated regulatory and compliance data processing
- Transparent, scalable automated system
- End-to-end integration of innovative analytical technologies with prevalent Systems
Operate advanced digital Client engagement models
Customarily, insurance Agents have been the primary points of interactions and engagements with customers in the insurance industry. However, during the past decade, taking inspiration from the banking and financial sector, insurance companies have started realizing the importance of digitally restructuring their customer engagements.
According to a study by Delloitte, “Our study suggests that the life insurance ‘winners’ of tomorrow will likely be those organizations that blend an advice-driven approach with a digitally enhanced engagement strategy to help meet evolving consumer expectations”.
Insurance areas and illustrations of digital client engagement model implementations
Following are a few facts that insurance Enterprises are looking at:
- Digital customer engagements facilitate a drastic reduction in customer service time and positive customer experiences (CX). Newer, online CX methods such as digital bindings, underwritings, full-fledged online insurance journey for customers, digital marketing, self-service portals for policy management and claims etc. are becoming the new norms.
- Such seamless customer engagements and CX are possible only if the end-to-end insurance operational processes as well as the back-end are fully digitized. Hence insurance enterprises have seriously started adopting digital customer engagements optimizing on cost, and diminished administrative strife.
Capitalizing on automated digital data capture and data movement
Off late, advanced digital technologies such as Artificial Intelligence (AI), Machine Learning (ML) and Internet of Things (IoT) have started gaining in importance across industry verticals. For the insurance industry, digitally capturing high risk data such as insurance claims, underwriting, costing etc. paves way for seamless customer management. Technologies that can digitally capture and channelize such data include drone surveillance data captures, telematics applications, location and home sensors etc.
Professionals from the industry feel that today’s insurance customers are already acquainted and comfortable in wielding online, digital devices for every smallest of their needs. Such high level of customer expectations requires an equal impact of digital engagement offerings in the form of customized individual insurance service rather than as a unit group of customers.
Forbes has recently quoted, “With 6.4 billion devices already connected and 5.5 million new devices added every day, the IoT’s real-time data collection and sharing power will create significant, new opportunities in finer product segmentation, more specialized pools of risk and predictive modeling to better assess risk, improve loss control and accelerate premium growth”.
Insurance areas and illustrations of digital data capture implementation
PAD and UBI, provide a real glimpse into individual habits for insurers!!!
A typical example of the insurance industry capitalizing on digital data channeling are Pay-as-you-Drive (PAD)’ and ‘Usage Based Insurance (UBI)’.
According to a recent market prediction, over 80% of newly sold vehicles and fleets in the US by the end of year 2020 would be wielding embedded telematics devices.
- Complemented by advanced GPS and telematics technologies used by drivers, these innovative applications facilitate capturing vital data such as driving habits of individuals.
- The data is dynamically shared with stakeholders, policyholders as well as the respective insurance companies.
- Advanced analytics applications used by the insurance Enterprises can then process these data to precisely link insurance premiums as well as generate accurate reports on individual driving habits, performance of fleets etc.
Digitization as the primary security driver for insurance
The core of any insurance principal has always been on individual safety and security. Opportunities for futuristic digital technology application in the insurance security domain are multi-fold.
Insurance areas and illustrations of digitized security model implementations
Residences/offices or vehicles fitted with digital sensors/cameras, provides the foremost means of security and hazard responses. More innovation calls for more sophisticated, innovative insurance products and services.
For instance, cyber security risks are increasing demands for innovative insurance product and services. Hence, technology innovations have altered focus on risk requirements-based insurance coverage rather than generic, basic risk coverage.
Disintermediation Insuretechs with delightful CX
Though in the infancy of evolution, several Insurtech companies with futuristic visions have come up with high-end digital insurance applications. These applications can act as insurance provider, broker as well as an online digital analytics customer interface, all combined into one. These application platforms possess the capability to process online customer insurance journeys. They possess automated claim and underwriting capabilities coupled with analytics platforms for product platform evaluations, chat platforms, peer networking capabilities for deploying capital, costing analytics algorithms, self-servicing platforms, and overall online insurance journeys for customers. Currently such Insurtech companies, however, serve a very less, and specific group of customers, with low risk scenarios and very few exception handling requirements.
Insurance areas and illustrations of CX implementations
- Prompt, quick messages to customers by insurance company of possible accidents and disasters such as burglary in a society, hurricane, flood related risk messages etc.
- Quickest possible processing of Claims: Online form filling by claimants, digital picture submission etc.
- Advanced analytics driven pricing provision, increased accuracy of prices, faster approvals/rejections.
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