4 trends that will shape the digital insurance landscape
Digital transformation in insurance is nothing new. It has been shaping industry dynamics for years, and it is only picking up pace. And yet, there are still many opportunities to seize, competitors to outwit, and experience-oriented clients to please.
The time to step up is now. Technology has always been important, but in the wake of the ongoing COVID-19 pandemic, digital transformation trends in insurance are now more critical than ever.
Here are four digital insurance trends that all insurance executives should keep an eye out for 2021 and beyond.
Digital insurance trend 1: No-code vs. code
Code has been the main driver of digital transformation up until now. But code means that innovation is quickly becoming legacy code – challenging to move, painful to integrate, and outrageously slow to change. To avoid the legacy code trap, enterprises are now shifting to the Platform Age of digital technology.
A no-code platform can help insurers innovate at scale. A no-code framework excels at answering the most significant pain points in 2020- market dynamics and the fast pace of change.
Agile change management is a must to survive in the current environment. And insurers can no longer afford to stick with long release cycles for new digital products like they did in the past.
A visual development platform empowers citizen developers – business users without coding knowledge – to design and release applications that drive the business forward quickly. Rigid software development cycles were no longer sustainable in 2020. With code, it takes massive resources and time to translate business and customer needs into a digital product.
In contrast, no-code environments provide a ready-built starting ground for app development and accelerate the software development life cycles by order of magnitude.
This allows insurers to develop new automated solutions to quickly and efficiently meet rising customer demands for outstanding digital experience.
Since no-code platforms make it easy for business users to build complex apps, insurance companies no longer need to outsource talent or rely on overworked IT teams for simple tasks. Internal software development experts can now concentrate on more challenging and creative tasks, such as improving AI algorithms and improving IT architectures.
Why no-code? A lower total cost of ownership, accelerated speed to market, increased efficiency, and, ultimately, faster digital transformation rate.
Digital insurance trend 2: Diversification of insurance distribution channels
Today, many insurance companies operate both affiliate and direct-to-customer channels alongside their custom agency channels. Whatever the mix of media clients ultimately come through, carriers need to provide a consistent experience across them (consistent expertise doesn’t necessarily mean cut and paste).
Shift to multichannel means that every channel must provide the best experience, orchestrated seamlessly and smoothly so that the customer can jump from track to channel without losing information or interrupting their experience.
Consumers are increasingly using many different channels as part of their analysis and decision-making. So no channel can be left behind when designing the overall customer experience strategy. A bad experience (or in any way confusing) will drive away valuable customers.
With this in mind, insurance executives need to adopt a multi-channeled distribution ecosystem by putting the customer first and the channel second.
New capabilities available through a multi-channel approach can expand insurers’ reach into new, existing, and changing markets to give consumers choices. The breadth of a distribution strategy can put an insurer right at the heart of a consumer journey- when and where the insurance is necessary and relevant.
If insurers fail to provide their clients with a consistent digital experience across ALL channels, customers will shift to enterprises that emphasize consumer experience. According to a recent survey performed by the US Chamber of Commerce, millennials contact their insurance companies up to two more times than other consumers through mobile and 2.5 more times through social channels. This is why insurers need to prioritize meeting the expectations of new, tech-savvy consumers, no matter the medium.
In a nutshell, an omnichannel service approach will enable the insurer to maintain its competitive edge, enhance growth, and retain its customers. But this approach means that no channel can be left behind.
Digital insurance trend 3: The rise of remote servicing
Remote servicing is not a temporary fix brought to us by courtesy of the COVID-19 crisis. It is here to stay.
Insurers are adopting remote servicing as the new normal. Simply put, insurers will need to migrate all their policies online and allow their customers to buy or access policies from whichever location. This is no longer optional.
Besides, customers who are already accustomed to using online channels for their everyday activities will adapt to digital access and tracking of policies. So why not go fully remote even after the impact of the pandemic subsides? With insurance companies switching to digital tools to offer service and advice, it becomes a one-stop solution, saving resources and time in the long haul.
Best of all, remote servicing will help insurers avoid possible disruptions in the future, as no matter what happens outside, they’ll no longer need to shut shop. This will, in turn, help them regain their footing once they reopen and even launch new products remotely, something that would have seemed untenable in 2019.
Digital insurance trend 4: Going all-in on automation
The truth is, customer’s needs, expectations, and knowledge have expanded exponentially throughout 2020. How can insurance providers adapt to their demands? There’s only one answer: automation!
In addition to the need for remote interaction, automation will be an important driver of customer experience in the front office, not just the source of back-office efficiency.
Furthermore, the insatiable customer demand for immediate gratification is a crucial factor to consider. They want a purely automated experience that doesn’t require human contact for the simple reasons of speed, simplicity, 24/7 availability, and effectiveness.
Some of the ways through which insurers can achieve full-cycle automation include:
- Robotic Process Automation (RPA): This strategy will take the driving seat in insurance, powered by newer data channels, advancements in AI algorithms, and cutting-edge data processing capabilities. While RPA removes the need for paperwork and brokers, its behavioral economics ability minimizes fraud- leading to reduced costs, time, and effort.
- Chatbots: Another mainstream strategy in both back and front-office is by using bots. Insurers can use chatbots to digitize claims management and policy servicing for a quicker and more personalized customer experience.
- Optical Character Recognition (OCR): This technology is an indispensable part of the ongoing digital transformation solutions in insurance. It allows for automated document analysis, sorting, and customer onboarding and streamlines all business workflows- from customer experience to product development to insurance claim processing. Through the electronic conversion of typed or handwritten texts into machine text, OCR will help insurers provide error-free, timely, and reliable data entry services.
- Gamification: Another strategy that will be increasingly fruitful in the future is gamification. Here, insurers can use a well-crafted prioritization model to build brand loyalty and supercharge customer retention rates.
- Digital customer journeys: Handling paperwork-based transactions can now be handled in a user-friendly manner without compromising user experience. The importance of customer-facing digital experiences is highlighted by the fact that remote interactions are as crucial as ever.
Digital transformation in insurance is moving at a dizzying pace. The insurers who will overcome the challenges that 2021 poses will be those capable of reinventing themselves and staying on top of the current trends in the industry.
Despite the economic uncertainty that the ongoing pandemic has brought, insurers must flex their digital muscles and embrace change to stay relevant, sustain client trust, and carve a better path for long-term success.
Are you looking to accelerate digital transformation through an optimized no-code platform? Get in touch with our team of experts or request a demo today!