From zero to digital during COVID-19 - How insurers are stepping up digital transformation initiatives
The appreciation of digitization in business is at an all-time high. With COVID-19 and government directives on social distancing, most businesses have had to fast-track their digitization schedules to keep interacting and providing services to their customers.
Surprisingly, the insurance sector falls squarely within the businesses scattering to digitize. Despite the vital roles that insurance company’s play, digital transformation in insurance has been slow and inconsistent.
58% of CEOs in the insurance field acknowledge they are behind other financial services in digitization. At the same time, the senior management is stuck inserting data into excel sheets.
This lag has not only negatively impacted the insurance companies but also the clientele in more ways than one.
Manual processes result in poor customer experience
Despite 85% of insurers agreeing that customer engagement and experience is a top initiative as of 2016, only 22% have a real-time digital or mobile services platform for their customers.
Even before the social distancing regulations, it was a steep task for customers to constantly walk into insurance offices for services they could easily access online if the proper framework were in place.
At a time when customer loyalty is at an all-time low and competition is growing, keeping customer experience up should be a top priority for insurance companies looking to expand their portfolio and customer base.
McKinsey estimates that insurance carriers that have provided customers with the best experience have generated two to four more times growth in new business, and their profitability has grown by up to 30%.
Digital transformation in the COVID-19 period can help insurers differentiate themselves by providing their customers a personal and engaging experience.
The use of emails, online customer platforms, and mobile apps can help send alerts and reminders to customers regularly.
Disseminating information and tips on social media platforms can also help reach out to new customers, especially millennials who find such platforms appealing and spend a lot of time on them.
Lengthy, time-consuming, and frustrating paperwork procedures increase costs
Insurers have an affinity for paperwork. While this has been a core practice in the business for years, it is high time to consider alternative processes that are faster and more efficient.
Paperwork is not only a pain to customers but also for the company. Customers don’t fancy having to provide their information every time they are switched to a new department. This can adversely affect the quality of service and customer experience.
The manual labor required to keep the books and sheets up to date is immense.
It could cost the company up to 30% more during the insurance claim journey.
During this time, when movement is restricted, customers can’t be physically present to follow up on their claims from one department to the next. With a bit of help from digitization, customers can easily file their claims online and follow up on the progress using a mobile app or website. By digitizing records, insurers can save costs on labor, improve response times, and cut cycle times to provide effective and timely services to their clients.
Why digital transformation in insurance has been lagging behind
Automating insurance services like underwriting, bidding, quoting, and issuing policies is not a walk in the park. It’s no secret that most insurers understand the benefits that come with digitization. However, every stride made should not infringe on any regulations, rules, or a variety of other requirements.
There are many reasons why different insurers are slow to take up digitization, but there are several main ones that make digital transformation in the insurance industry very difficult.
Every admitted carrier has to deal with insurance commissioners, and every product must be filed for approval before being passed on to the clients. The approval requirements change depending on country and location and other aspects of insurance like application forms, policy forms, coverage, and endorsements.
The plethora of product filings, licensing requirements, and compliance all pose a challenge to the digitization of the insurance industry.
Most insurers also have expensive legacy systems that maintain service to existing businesses. All these regulations, requirements, and the need for approvals make it extremely difficult for the insurance industry to take up digitization.
Insurers are good at collecting and analyzing data to find new opportunities and gather customer information. Using this information, insurers can assess risks, billing, claims, and pricing.
Going digital during COVID-19 means that insurers now have to rely on information coming from a universe of data from a different volume and category.
Dealing with digital information requires a novel approach far beyond the culture and tradition of actuarial science.
To make sense of the data the industry can gather from digital sources, the company would have to address the data in iterations by creating a repository of internal data then testing it to find ways to benefit them.
Most insurance companies are not ready to take up the significant responsibility and the risks and oversights that might come with new data collection methods.
- Legacy IT
Insurance was one of the early adopters of Information Technology. Most of the systems adopted by the insurance companies were before the internet days. Over the years, capabilities have been patched on the systems to improve performance and make the technology more compliant. The resulting infrastructures are complex and counterproductive.
What’s more, the old technology, though bespoke at that time, is unable to keep up with the new information. One of the downsides of legacy systems is the cost required to implement better, more recent, and more flexible technology. The insurer not only needs to invest in the system but the human resources to migrate, input, and interpret the data into the new system. There are risks like the loss of some data involved in such processes.
Using Legacy IT systems, insurance companies find themselves with just the right amount of sophistication that also happens to bar the adoption of newer technology free from dependencies but requires the process to be broken for any advancements to be made.
How can insurance take up digital transformation in the face of COVID-19? In the past, insurance companies have had time to try, test, and approve different digital platforms and solutions. Those who don’t have a working digital platform are now hard-pressed to make their services accessible to clients, mainly because they cannot make face-to-face meetings with them.
Digital solutions like no-code by EasySend can help insurance companies build complex and secure applications using a drag and drop approach. Using no-code saves you the trouble of learning to code or hiring expensive experts and saves you testing times. You can come up with quick and effective digital solutions that can help your clients obtain insurance quotes online, get access to services like claim follow-up, and even capture new leads and prospects.
For ill-prepared insurance companies that don’t have any semblance of a digital platform, no-code is the ideal digital transformation solution in the insurance industry. It can help you stay afloat and get new business without spending too much time or change your process drastically.
No-code tools are accelerating digital transformation in insurance
In the wake of the COVID-19 pandemic, insurance companies are learning the hard way that they should have paid more attention to digital transformation over the years.
Adopting a fully-fledged digital solution is almost impossible at the moment. Nonetheless, the need for digital presence and solutions is imminent. With the help of no-code by EasySend, you can pace your insurance business and stay ahead of the pack by ensuring leads, prospects, and your clients have access to vital information and tools to keep them engaged and interacting with your brand.