Most digital insurance innovation occurs across customer-facing functions and applications. By enhancing the experience on digital platforms, insurers are investing in their growth and their most valuable asset — the customers. These components — the insurance ops that generate value — are what is known as the insurance value chain. These should be of the utmost priority for any undertaking related to digital insurance.
When speaking about the digital insurance value chain, we are referring specifically to:
- Product management
- Sales and distribution
- New business underwriting
- Customer Service
Benefits of Digital Insurance
Insurers know the intrinsic value of being on the cutting edge of the industry — insureds want to know and trust they are working with a company that is using the latest tools and technologies to give them the best service possible. Implementing digital insurance solutions is the simplest way to communicate that, and insurers will quickly see the benefits, such as:
- Meeting & Exceeding Customer Expectations: Today’s consumers expect everything to be instantaneous, when and where they need it. Whether it be communication, payment, or even service, insurers must have the infrastructure to meet insureds where they are. Digital insurance makes that possible, with features like self-service portals, live chat, and insurance apps catering to modern consumers and making key insurance functions like policy administration claims, and billing a nearly automatic process.
- Fraud Detection: As mentioned before, the greatest benefit of digital insurance applications is the sheer volume of data that they generate. And while it is generally positive data that helps insurers perform their jobs better and customers to get better rates, data is also catching criminal activity. Customer relationship management software can be used to search customers’ social profiles for any activity related to a claim, and predictive analytics is being used to spot trends in customer behavior that might be a red flag for fraud.
- Cost Reduction: Going digital has been shown to greatly increase cost savings, both for insurers and insureds. With more accurate underwriting driven by big data, AI, and predictive analytics, insurers and insureds both save big. Digital insurance is also increasing the speed to market new products, another revenue generation opportunity. Digital technology puts margins under pressure as premiums fall under the weight of price competition and as new ways of mitigating risk emerge. Under these conditions, insurers will need to harness digital to make their operations more efficient, aggressively lowering costs. Also, insurers can expect cost savings of as much as 40% from the claims process.
- Employee Experience: Digital insurance is just as sought after by insurance brokers and employees as it is by consumers. Digital tools such as comprehensive dashboards, SaaS applications and tools, and unified data systems not only make their jobs easier, they help them perform their job duties better as well. With all the tools possible at their disposal, insurance companies are investing in their employees with digital insurance.
- Low-Code Capabilities: There is a common and valid concern that converting to a largely digital operation will require hiring developers, IT professionals, and people who are well-versed in working with these digital insurance tools. Fortunately, low-code solutions exist to mitigate these fears. Low-code is an easy-to-use development methodology that lets users drag and drop application tools and features to build their digital solutions. No more computer science degree is required, and no need to hire an entirely new team of web and application developers.
Inmediate is an insurtech startup from Singapore that is using the latest technology such as Artificial intelligence, Distributed Ledger, and NLP, making insurance processing and underwriting fast, cheap, and flexible. That gives for better processes, lower costs, improved time to market, and new revenue opportunities.