Marketing TeamJun 22 2018 in Blogs
5 PILLARS OF DIGITAL TRANSFORMATION STRATEGY IN INSURANCE
The future is digital, and no matter how much an industry tries to circumvent this eventuality and hold on to traditional ways of conducting businesses, change is inevitable – and in the best interest of both the customer and service providers. The insurance industry is not immune to this urgent need to upgrade and digitize, either. In the last article, we discussed how the Indian insurance industry, although catering to a relatively small market at the moment, is poised for exponential growth in the near future. Reports also lay bare the fact that customers today – both digital natives and immigrants – expect insurance service providers to offer multiple-channel digital touchpoints and 24/7 services. In such a dynamically changing environment, insurance companies need to have a focused approach and a consolidated digital transformation strategy, with every digitization effort tied to clear business objectives that offer the maximum value-add to customers, increases productivity, and makes processes smoother.
Some of the key areas that insurers need to focus on, while developing their digital transformation strategy are:
Innovative product and service offerings
With the emergence and fast-track growth of the Internet of Things, insurers can no longer rely on static products and services to cover the entire realm of a customer’s needs today. For example, the use of self-driving cars and drone technology offers both great opportunity as well as immense potential for misuse. Cybercrime is a nuisance none of us are immune from. It is self-evident, then, that insurers need to keep innovating to cater to new needs. Risk assessment and opportunity for new offerings can happen only through digital analysis of large amounts of data.
Improving the customer’s experience and engagement
With the amount of competition in the insurance industry, coupled with the fickleness of customers that are willing to switch service providers if they are not adequately catered to in the digital age, insurers have had to move away from a sales-focused approach to customer-centric models of doing business. To be able to offer the customer a personalized and engaging experience, insurers need tools that will enable advanced data analysis. This has been made possible by Information and Communications Technology (ICT) infrastructure and Customer Experience Management (CEM) platforms.
Perception management – insurance as a lifestyle enabler, not just risk protection
Any insurer can write a cheque when something goes wrong. But being an insurance provider in the digital age is about offering more than traditional products. It is about forging and maintaining a relationship with the consumer by offering them insights, information, products and services that help improve their health, aid well-being and enable better lifestyles. This, too, requires data analysis that provides a comprehensive single-view of the customer.
Improving distribution by adopting a multi-channel approach
From living in a mobile-first world, we’re now moving towards a mobile-everything world, especially with the large millennial customer base that insurers are trying to bring under insurance cover. To hook this audience, insurance providers need to maintain an active presence on all emerging social channels. Due to the heavily regulated nature of the industry, a big part of an insurance provider’s digital transformation is about partnering with FinTech companies to use APIs to bridge the gap between insurers and customers without running into legal, regulatory or compliance issues.
Optimizing back office operations
Digital disruption in insurance is not just about transforming front-end operations and customer interactions, but optimizing processes at the back end too. Simple technological interventions such as cloud computing, automation of non-creative processes, using blockchain to improve payments processing, APIs, etc. can alleviate a large chunk of human capital costs and make back-end operations seamless. According to a Harvard Review report, insurers who adopted digitization experienced 65 percent cost reduction and 90 percent decrease in turnaround time on key processes.
The insurance industry as a whole is in the early stages of digital transformation, especially in India. It is still trailing behind other advanced sectors and their innovation cycles. One of the most important considerations for digital transformation is to assess emerging technology and harness the opportunities presented by new tech. The ability to quickly understand and adapt to a fast-paced digital landscape is what will help insurers reap the benefits of an interconnected global economy.
Monocept drives digital transformation for its partners in the insurance industry. To know how more write to firstname.lastname@example.org.