Digital Insurance Reshaping the Industry through Technology

The ever-evolving world of technology has brought significant competition to the insurance industry. To stand out from the competition and stay relevant, insurance companies constantly push to find new ways to attract customers. One of the ways that the insurers do this is by offering digital insurance policies. These paperless policies take advantage of the advances in technology enabling the whole experience, including buying, renewing, registering, and claims process – a complete digital experience.

Traditionally insurance companies faced significant challenges in policy acquisition, administration, and claims processing. Digital insurance solves these issues through automation and efficient processing to reduce manual intervention and multiple steps that people had to go through earlier to avail of a policy.

Digital Insurance: Reforming the Policy

Digital insurance is an innovative way for insurance companies to provide coverage to their customers. It allows customers to purchase and manage their policies online without needing paper documents or in-person meetings with an insurance agent. It is quickly gaining popularity as more and more people become comfortable conducting transactions and managing their finances online. As a result, many insurance companies are starting to offer digital insurance options, and the trend is expected to grow in the coming years.

There are several advantages of digital insurance for both customers and insurers. For customers, digital insurance can provide a convenient and hassle-free way to purchase and manage their policies. In addition, they can compare policies and get lower rates by purchasing their policy online. For insurers, digital insurance can help reduce costs associated with printing and mailing paper documents and save time by eliminating infrastructure setup and the need for face-to-face meetings with agents.

Modifying the Industry Ecology

Digital insurance is still in its early stages, but it has the potential to transform the insurance sector. By automating manual processes and using data to identify fraud and waste, insurers can save money that can be passed on to customers through lower premiums. Insurers that embrace this new approach will be well-positioned to succeed in the years ahead.

Here are how the insurance companies can embrace this trend:

1. Transforming IT Infrastructure: Insurance companies can avail several benefits if they undergo a timely digital transformation to change their core IT infrastructure. For example, IT transformation can assist automation of core processes such as claim process, faster time- to- market with new products, roll-out more policies, and enhanced front-end user experience.
2. Upgrading Connectivity: Insurance companies can adapt to more lines of communication to connect with the customer. Social media, emails, and intelligent texts are modern ways to reach potential clients. Insurers can also collect customer data from multiple touchpoints to understand the customer needs and pre-match the qualifications for specific products.
3. Enhancing Customer Experience: Companies can improve customer experience by introducing a digital hybrid model to manage transactions, and administer policy and human communication. Simplifying the customer onboarding process with user-friendly front-end access should be the core aspect of modern CX strategy.
4. Broaden Customer Engagement: Companies can diversify their reach to their customers by using multiple languages for documentation and policy frameworks. In addition, insurers can streamline the communication channels with virtual and physical connections to keep the customers engaged throughout the policy and not just during renewals.
5. Simplified Claim Settlement and Grievance Redressal Mechanism: A report from IBM suggests that 42% of customers do not fully trust their insurers. This is due to complex claim settlement processes and a lack of human engagement arising from ineffective customer experience strategy. Simplifying claim settlements and brisk grievance redressal can help insurers gain customer loyalty over time.

Key Takeaways

Although insurance companies have seen a drastic change in the industry ecosystem in the past decade, many things need to change. Traditionally, insurers were not required to address customer perceptions about their company, but today customer perspectives and opinions are the main drivers of the buying factor towards an insurance company. In addition, companies are competing to reduce premium amounts as digital insurance moves towards paperless policies that require no physical meets, no branch setups, and are entirely paperless.

Companies like ACKO have embraced this change and have moved towards a completely digital insurance buying experience by deploying the right tools, data analytics, and technology to provide cheaper policies compared to other insurers online. In addition, driving a customer-centric strategy and approach can assist insurers in combating proliferation caused by social media and the internet, where customers can check various insurance options simultaneously. Lastly, the covid-19 pandemic has highlighted promoting customer convenience and outreach right at their doorstep that insurers must strive to achieve more success in the industry.