In the past few years, implementing advanced technology has become an integral part of the insurance industry. Today, a customer can buy a preferred policy with only a few clicks on their mobile phones and paper insurance cards are becoming a thing of the past. The digital insurance industry trends are poised to become more advanced in 2023.
The global insurance technology market is currently growing at a CAGR of 10.80%. Automation, data-driven ecosystems, an omnichannel approach, and a focus on customer self-service is driving the pace of this change. Insurers looking for a competitive edge should consider embracing these four emerging insurance industry trends.
1. Automation of Underwriting and Claims
In traditional underwriting processes, in-person evaluations were the norm. With the advent of digitization, insurers incorporated several methods to improve the underwriting process and made it simpler for all the parties involved. Automated underwriting is one such technology trends in the insurance industry.
The goal of automation is to reduce human touchpoints to zero. It starts with streamlining information gathering using technologies like OCR and digital data capture that auto-fills insurance forms and employs artificial intelligence and robotic operations to replace manual processes. It further improves decision making by automating validations and premium calculations.
Additionally, it notifies the underwriter when the applications cannot be processed in a straight-through environment. This can save insurers a significant amount of money and time. Hence, insurers, especially leading ones have incorporated automated underwriting in their value chain. According to a survey by LIMRA more than a quarter of life insurers in the US have expanded their automated underwriting practices.
As is the case with underwriting, insurers are increasingly focusing on automating claims processes. The use of digital tools is reducing the time taken for processing and payment. This has resulted in two very beneficial changes:
- Less waiting time for end customers
- Helps insurers sell more products within a short duration
2. Omnichannel Approach
According to a McKinsey article, established insurers are investing heavily in an omnichannel approach for insurance distribution and policy management. They are primarily focusing on omnichannel distribution.
An omnichannel distribution model in insurance is an approach assisted by technology that provides customers with multiple channels to purchase policies.
This model enables insurers to reach customers via different mediums with diverse types of content, all the while guaranteeing excellent customer experience. An omnichannel approach also helps the insurer to unify their diverse sales channels and track their performance from a single view.
3. Customer Self-service
According to a McKinsey study, about 90% of life insurance agents’ sales conversations happened in-person before May 2020. The number shrank to as low as 5% after the pandemic. Insurers faced a push to switch to digital communication methods and meet clients remotely. This shift has enabled a rise in self-service portals.
Self-service portals pose enormous potential for insurers to harness since they simplify the way policyholders receive their insurance services. The main goal of these portals is to provide a personalized customer experience. Additionally, it aids insurers to take new approaches to cross sell their insurance products since it can be easily built over mobile applications.
Customer self-service portals allow customers to buy insurance products using their mobile phones in an instant. Further, they improve customer experience since it is becoming one of the most preferred modes of service for modern tech-savvy consumers.
4. Data-First Ecosystems
A data-first ecosystem is a strategy that involves deploying tech-first, advanced components to cover major insurance functionalities.
The modern market rewards dynamic carriers that leverage everything technological transformation has to offer— instant APIs, insurance automation, and self-service. Hence, numerous leaders in the industry are placing ecosystems at the center of their strategy. For example, an Accenture study found that 54% of insurance executives are actively seeking ecosystems.
Furthermore, a substantial amount of data is available owing to the widespread usage of smartphones and other devices. This opens up an excellent opportunity to invest in data-first ecosystems.
A classic example of this is the case of health wearables in life and health insurance. The technology collects critical health information that can aid in configuring interactive, highly customizable life and health insurance policies.
Additionally, data-first ecosystems help insurers provide more personalized services and at the time it is needed.
Although, the above discussed digital trends in the insurance industry are set to alter the ways insurers configure policies and end consumers purchase them. It will also dramatically change the way insurers and customers interact with one another.
Finally, the insurance industry trends are constantly evolving, and it can be challenging to keep up with them. Nonetheless, with the right technology partner, insurers can stay relevant and constantly level up their game. Check out iNube’s platforms and solutions and know how it can help insurers in keeping pace with the evolving industry today.