What’s happening in the insurance industry in terms of digital transformation?
According to Forrester, 56% of the decision-makers in insurance companies recognize the importance of accelerating their digital transformation in the months to come. This rate is higher than in other industries because the insurance business does not seem to have reached digital maturity.
A study conducted by Accenture confirms this delay and indicates that the industry has not changed much. The study identifies four periods of disruption, each with its particular implications: viability, volatility, vulnerability and durability. The insurance industry appears to be in the vulnerability phase, which is characterized by low innovation and structural inefficiencies. That needs to change!
Reasons for the digital delay among insurers
The insurance industry is lagging in its digital transformation because it underestimates the positive impact of making the switch. It sees digitization as a tactical or technological choice. Yet it lacks a broader vision, such as developing new markets and products or offering a digital customer experience to better meet consumer needs.
Sixty-eight percent of insurers see legacy systems as one of the obstacles to moving forward. Whether it’s to prepare contracts or to manage insurance policies, complaints or invoices, insurers rely on systems that are sometimes totally outdated. Daily tasks are all the more complicated because of the diversity of products (home insurance, auto insurance, business insurance, etc.) and the customized nature of insurance.
Completely changing these systems would be too costly and counterproductive for these companies. So what are the digital options available to them?
How insurers can embark on a digital transformation
- Provide a better customer experience: The insurance industry is by nature an industry in which customers expect high-quality, personalized Each insurance policy depends on the customer and his or her situation. So customers want to be heard, advised, supported—and they want answers to their questions. However, merely 30% of companies seem to be responding to questions effectively. Improving the customer experience is vital in satisfying customers and earning their loyalty.
- Develop multichannnel communications: To make the customer experience even more pleasant, insurers must diversify their channels of communication. Customers expect to be able to find information online using their phone or tablet. They also want to be able to compare products through dedicated platforms. When needed, they want the ability to speak to an advisor and develop a good relationship with that advisor. So the experience does not have to be fully digital, but it needs to be varied and sometimes instantaneous. Some customers want immediate answers to their questions or, as reported by 24% of life insurance buyers in the United States, they want to be able to purchase insurance products online. There are many opportunities for insurance companies to improve their customer relations.
- Automate more processes: Although many operations still require human intervention, other repetitive tasks can be automated, like sending mail, managing internal processes and processing certain data. Each insurance company must decide on what is feasible under its particular circumstances and based on its customers’ expectations. For example, automation can cut down on costs related to complaint processes by 30% while boosting customer satisfaction through fast and reliable service.
Insurers seem to have good reasons for delaying their digital transformation. But there are several options available to them to accelerate the digital experience. Objectif Lune is here to support you step by step, and to find the best solution to meet your needs. You are welcome to read our white paper for a more in-depth understanding of digital transformation.3