This year hasn’t been kind to us at all and subsequently, every industry is facing unforeseen challenges. Yes, needless to say, Covid-19 has had an unceasing impact on everyone. Simply put, the COVID-19 situation is fast-tracking the digital transformation decisions for all the companies including insurers. So, in these critical times, what can insurers do to instigate trust and connect with their customer? In this blog, we discuss the challenges and digital transformation strategies that insurers can utilize to win over their customers.
Let’s assess the situation first – According to Salesforce, insurance-related stakeholders are:
- Wanting to be heard
- EduPlacing value on a personal touchcation
- Concerned about annuity and variable life contracts
- Facing challenges for effective communication
- Witnessing overwhelmed advisors, support and compliance staffs
- Getting strained in manually intensive processes due to office closures
- Unclear about work-from-home policies
Government-imposed lockdowns and retroactive legislative mandates are impacting both insurers and policy holders. The leaders in the insurance industry need to deliver trust, transparency and convenience. And to ensure this, they need to adequately communicate with their customers. Here is how the policy changes transform the way insurers serve their customers –
- Workforce compensation and similar coverages will continue to experience higher claim volumes.
- Travel policies: Low premium coverages such as travel policies will get affected due to the increase in significant expenses. Insurers like Allianz are now covering for coronavirus related delays or cancellations
- Life Insurance: Due to the widespread pandemic, life insurers will see a rise in long-term care, life and disability claims.
- Financial market situation: For insurers, volatility in the financial markets will impact investment income especially those who are life carriers with annuities and retirement products. Insurers should monitor their investment portfolios and consider diversifying if required.
Now, we discuss the various challenges that insurers are facing and their respective strategies of digital transformation.
Accommodating the increase in Online Stakeholders: One of the biggest challenges for insurers is – how to drive more effective connection with digital-savvy customers and those who are accustomed to online shopping. Simultaneously we need to consider how insurers can help agents and advisors boost their productivity in this digital age.
Digital Transformation Strategy: Upgrade legacy marketing and distribution systems with CRM systems like Salesforce.
Note:Beyond of 2020, nine out of 10 new life insurance sales are expected to be influenced by digital interaction activities such as –
- Online searches to assess life insurance providers and advisers
- Comparison of price and coverage options.
- Application for a life insurance or annuity policy on an insurer’s website.
- Others could look to take advantage of increasingly sophisticated Robo-advisory services.
58% of Americans expect to use a Robo-adviser by 2025, while 71 per cent want access to such self-service technology along with human advice. Most companies still tend to direct lower-income investors to Robo-advisers for seamless operation and cost efficiency, while HNI clients tend to receive a high-touch, human experience.
Workforce Management: With the onset of a sudden WFH situation, insurers are finding it tough to manage their workforce.
Digital Transformation Strategies:
- Offer alternative staffing opportunities such as contract and freelance arrangements.
- Adopt digital transformation to alter the work-nature and talent-needs of the insurance industry. For example, in underwriting and claims processing, there is a growing demand for a workforce with higher-level skills such as analytics, AI, and other advanced technologies.
Cybersecurity : With great technological power comes a sizeable amount of cyber risk. Usage of upgraded technologies help insurers engage better with customers and enable new products and service capabilities, but they can also make it difficult to maintain the cybersecurity equilibrium. Insurers are also handling more data than ever before, thanks to all the mobile monitors, vastly expanding the digital treasures that the CISOs are called upon to secure.
The Cloud – A Business Methodology : Insurers are finding it tough to manage their legacy/modern/on-premise systems.
Digital Transformation Strategies:
- Insurers should evaluate the cloud as a platform for their modernized/legacy core systems. The cloud is more than a destination for data and applications; it is a business methodology which enables transformation in core systems while providing the computing power and flexibility to integrate more advanced technologies, such as machine learning and AI.
- Hence, cloud services like AWS (Amazon Web Services) can provide them with added agility and flexibility to meet their future requirements. Insurers who may already be building on-premise solutions should look to upgrade delivery capabilities using the cloud.
- Also, hosting selected core applications on the cloud could help insurers be better prepared to meet future business transformation needs.
Thus, insurers are in the need for building customer-centric and end-to-end digital transformation strategies that are based on trust, transparency and convenience to deliver a unified customer experience across lines of business and functional silos.
Now, let’s have a look at how the insurance industry, in general, can use digital transformation strategies to overcome their challenges.
- Making customers digital-savvy. For example, with the use of mobile apps supported by Guidewire & Salesforce at the backend.
- Setup, streamline and automate online processes using chatbots for managing online claims while reducing data loss, call-centres’ workload, and increasing the information exchange between the customer rep and the policyholder.
- Real-time communication to reduce risk, and customer grievances.
To know more about how digital transformation can be made easy, please contact us at : email@example.com