As the global climate and population rise, the insurance industry is quickly adapting to its customers’ needs. Costs are exponentially increasing, and insurers are needing to invest in prevention to save the industry — and their customers’ best interests.
This means insurance companies are no longer there for their customers only in times of disaster. Modern approaches to insurance increasingly require incentives to better align customer and insurance company goals and ensure the business model can work for the future.
Three Trends Driving Insurance Transformation
But to drive true business model changes and enable company flexibility and agility, insurance companies are investing in cloud-based technology. Digital transformation and modernization are underway for insurance companies as they work to introduce updated insurance models for an ever-more unpredictable future.
Three key trends are driving this transformation:
- Financial health and wellness — addressing the competition. Younger customers want simpler ways to manage their financial wellbeing, and insurance companies are adapting to a “Robinhood Markets simple” user experience and business model. Today’s customers expect that insurance coverage will be easy to get, easy to understand and operate seamlessly within their other technology experiences.
- Ecosystem and omnichannel engagement- building a partner network. There are many eco-system and niche insurance players which are growing, and they will become a critical way for insurance companies to engage with their customers. Yet, to plug these solutions into the existing business as value-adds for customers, a modern, extensible platform is needed. Most insurance companies are still using on-premise technology, which hinders partnership options as quick plug-and-play solutions.
- Long-term value- measuring what matters most. When it comes to insurance companies, younger consumers care about more than just the cost of the product. They want to see organizations taking a stance and making real, substantial progress toward sustainability. This makes brand reputation incredibly important, both externally as well as within. Maintaining high-quality talent has now become a c-suite focus. All of these activities drive long-term value that is challenging to measure in the near term, and companies will need to shift to reporting tools that help make financial sense of the new priorities.
Transformation Starts With The CFO
As insurance companies embark on their digital transformation, they must ensure that the finance organization is fully bought in.
After all, you need to be able to measure and report on the work and impact, both for an immediate digital transformation to the cloud, but also as newer projects are approved to catch the company up with the competition and build a larger partnership network.
Plus, there is a lot of financial efficiency and process improvements that can be made quickly. Typically, insurance companies are still using a lot of legacy systems, and fragmented data is abundant. So, as a first step, companies start by developing the necessary regulatory reports, which builds a foundational approach that can be used across the organization.
Customer Centricity Is The Goal
There are also a lot of other manual tasks happening across insurance organizations. For example, the insurance policy department and processing claims department have historically been kept separate due to previous computing limitations. This can cause a major disconnection when interacting with the customer, placing the customer experience at risk.
In addition, suspense accounts and reconciliation have been kept separate. Now, data is sitting in multiple data stores, and when employees need to resolve the financial gap between operations and finance, the work is manually intensive. The data is hard to access, and teams are highly dependent on IT. Thus, the need for an integrated financial platform becomes ever more evident.
Improving the Customer Experience
The insurer’s role is changing. What was originally about managing costs, risks, and calculating premiums is now also about prevention awareness and investment.
Insurance companies ahead of the digital transformation curve are using data to educate their customers, and monitor customer prevention activities like regular exercise, eating a healthy diet, and getting enough sleep, for instance. This data can better help the insurance company track the customer benefits of prevention across all types of insurance and offer better incentives to encourage larger groups of people to take similar actions.
Insurance, after all, has always been about people — and the uncertainty that each of us faces. Insurers cannot exist without the customer base, and it is in both their and their customer's best interest to educate, encourage, and protect the customer holistically.
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.