The shift to digital is inevitable for insurers. Forward-thinking insurers are already investing heavily to transform themselves. They are exploring the many ways that new technologies and sources of data can enable them to transform the customer experience and introduce innovative products.
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The digital insurance market is growing rapidly and policies sold through digital channels are expected to reach €25 Billion Annually in Europe in 2016 (accounting for 18 percent of European insurers’ total annual new business premium volume). Insurers need to understand how to maximize the value of Digital in order to claim their share and stay ahead of the competition. Therefore I would like to highlight 3 megatrends which will have a profound impact on the insurance industry over the next 5 years: the transaction to personal interaction, the right data and analytics, and the need for seamless collaboration.
1. From Transactions to Personal interaction
With the imperative to better manage relationships at scale, one of the megatrends that will transform the insurance industry is the opportunity for insurers to take customer relationships beyond merely transactional. In this digital world, insurance companies have the ability to utilize emerging technology to expand, tighten and personalize relationships with (potential) business partners, customers and agents. Thanks to richer digital interactions, insurers have the ability to build relationships with consumers wherever they are and whenever they need it.
This transformation is critical to attract consumers who are becoming increasingly unwilling to buy a product or service that does not provide the same levels of convenience, simplicity and speed to which they have become accustomed from many other services they use every day. Especially, the “digital generation” or Generation D won't accept the traditional dynamic as it is permanently connected and used to purchasing books, electronic devices, music and travel online. Insurers must invest in capabilities with a clear strategy to improve the overall customer experience with every interaction.
2. The Lack of the Right Data
Nowadays, insurers are flooded with data from all corners of the enterprise: operational data, business partner data, data from processes and sensors, in addition to customer data from social media, e-mail and call centers. Insurers are no longer suffering from a lack of data, but suffer from a lack of the right data with the right quality. Focus is critical to avoid unnecessary data hoarding. The objective is to focus on the right data for better analytics which in turn will result in more valuable insights and better decision-making.
Effective and efficient data management and analytics allows insurers to enhance their operations in:
- distribution, getting a 360 view of customers to provide a seamless multi-channel experience
- in claims, help optimize claims processing, thereby reducing costs and enhance customer service;
- and in underwriting (define more accurate refining and pricing risks.
3. Seamless Collaboration
Today’s advances in technology have made it easier than ever for people to work together, no matter where they are. At most, insurers enterprise collaboration has not advanced beyond siloed communication channels, despite the use of email, video conferencing and social media. Clearly, in an age where every worker is an information worker, that needs to change. Therefore, the last megatrend “seamless enterprise collaboration” is focused on building social, collaborative applications throughout the enterprise and embed them into core business processes.
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"Digital goes beyond a new distribution channel – it is the transformation of every process in the insurer’s business."
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High performance insurers are already seeing positive results from using collaboration technologies to make expertise available at the point of need. There is tremendous opportunity to use collaboration tools to match customers with relevant experts. Experts who are best equipped to sell more complex products – real live examples are for instance click-to-chat and click-to-call capabilities. When social collaboration is plugged directly into the workflow, visibility between and within teams is enhanced and information bottlenecks can be broken down.
For insurers the time to take action is now. The threat posed by emerging competitors such as Internet giants is real because user-experience improvement is part of these companies’ DNA, and this is a strategic weapon in gaining market share in the insurance distribution business. Digital goes beyond a new distribution channel – it is the transformation of every process in the insurer’s business. Although distribution and sales were formerly the primary focus of digital strategies, the move to digital is also building pressure to upgrade service and claims. Soon, no part of the value chain will be left untouched.