What will the future of insurance look like? How is digitalization changing the face of insurance? These are some of the questions that occupy the minds of insurance professionals. The increasing adoption of AI, VR, and IoT has led to a transformation in various industries. Industries such as auto, healthcare, and retail have already seen a visible change because of digitalization. Similarly, the insurance industry is also undergoing a similar transformation. Let’s take a look at how digitalization is changing the face of insurance.
Why is the insurance industry going digital?
Since the 1990s, the insurance industry has been rapidly evolving with new technological advancements such as internet, cloud computing, and mobile devices. Digital transformation has become a global phenomenon affecting all industries and economies. The insurance industry has been one of the sectors that has greatly benefited from the digital transformation with a number of advantages. Let’s take a look at some of the benefits of digital transformation in the insurance industry.
Benefits of digital transformation in the insurance industry:
- Shorter Policy Creation Cycle – Digital transformation has made it possible for insurance providers to streamline their workflow. As a result, the cycle to create a new policy has been significantly reduced.
- Increased Sales – Now that customers have access to a wider range of products and information, they are more likely to purchase insurance.
- Wider Customer Base – New technologies have allowed insurance companies to reach customers globally. By going digital, insurance companies can reach a much wider audience.
- Better Risk Assessment – The use of data and analytics to understand customers better has enabled insurance providers to provide customized policies.
What impact are new technologies having on the insurance sector?
As we have seen, the insurance sector has undergone a massive transformation over the past decade. In the old days, when you wanted to buy an insurance policy, you had to visit an agency. There, you would fill out an application form and the insurance agent would assess your risk. After approving your application, they would give you a printout of your insurance policy. However, things have changed quite a bit since then. Today, you can buy an insurance policy online. You don’t have to go to an agency or fill out a form. You can do it from the comfort of your home. This is just one example of how the insurance sector has undergone a transformation because of digitalization. Let’s look at the other impacts of digitalization on the insurance sector.
Low code automation is changing the face of insurance
In insurance, as in many other sectors, the industry leaders look more like technology companies than financial services. These large companies operate and innovate in an agile way as if they were software development companies.
Today there are low-code platforms that allow programming and software development with a very simple visual interface. This is allowing smaller-scale insurance companies to have skills in the cloud, design and develop, and even achieve integration with other systems via API, with non-technical staff and without in-house infrastructure. This ease of use and access has unleashed unexpected growth dynamics in business-oriented innovation for companies of all scales in the financial ecosystem.
Voice Recognition & Chatbots
In this digital age, customers prefer to interact with insurance companies using voice recognition and chatbots. With voice recognition, customers can make their requests, ask questions, and receive information. They can also be given instructions. For example, customers can use voice commands to ask about their insurance policy, see the details of their claims, and make payment. They can also be given instructions about their policy. Chatbots are also being used to give customers information about their policies and download documents. Insurance agents can also use chatbots to interact with customers and resolve doubts and issues.
Autonomous Vehicles for Responsible Insurance
With the advent of autonomous vehicles, it is likely that they will be used in insurance policies in the near future. Autonomous vehicles are expected to be used for ridesharing services like Uber and Lyft. However, autonomous vehicles can also be used for responsible insurance policies. For example, one of the biggest challenges of insurance is determining the amount of the premium. With autonomous vehicles, the premium can be calculated based on the distance driven and the average fuel efficiency of the vehicle.
Are there lessons from the banking sector that can be transferred to the insurance sector regarding digital transformation?
We’ve already seen how digitalization is changing the face of banking, and the insurance sector is also undergoing a transformation because of digitalization. However, there are a few key differences between the banking and insurance sectors. While most banking services can be offered online, not every type of insurance can be bought online. One example where the insurance sector can learn from the banking sector is in customer onboarding. For the insurance sector, there are a few key lessons. Firstly, customers expect a seamless, easy, and quick onboarding experience. They don’t want to fill out a form or wait for an agent to approve their application. Secondly, customers expect their information to be verified instantly. Thirdly, customers want to do everything from the comfort of their homes.
Digitalization has transformed the insurance sector quite significantly. From the way policies are bought to how claims are processed, the sector has changed significantly. With the rise of new technologies and artificial intelligence, it is likely that the insurance sector will undergo a massive transformation in the next decade. In the future, customers will have advanced services when they buy an insurance policy. They will have a seamless, easy, and quick onboarding experience. They will be able to do everything from the comfort of their homes.