To remain relevant, insurers can no longer ignore the changes in the environment in which they operate on a daily basis.
Even though most insurance companies are aware of the challenges they face, some still see digital transforamtion as a necessary evil. They will eventually have to change their minds, since only insurers able to consider IT as real levers of success will remain, or become, successful organizations, efficient and innovative.
Here are four trends to guide insurers through their digital transformation strategy.
1. Meet growing customer expectations
The development of IT today is due to a new business concern: the consumer - user.
Nowadays, consumers are looking for an experience:
This applies to almost all the companies with which consumers do business with. Insurance companies must therefore also offer customers an experience that fulfills there desire for simplified accessibility; from the date of inquiry, policy claims, settlement, and even the research of their insurer.
2. Ensuring data security
By creating increasingly more personalized interactive platforms, insurers accumulate data on their clients and prospects. This precise information enables insurance companies to develop products best suited to their client’s needs, as well as tools that meet their new expectations.
This advanced technology is not without negative effects for the consumer, who might feel some discomfort in disclosing their information. Indeed, a recent study by Forrester found that 39 % of clients of insurance companies acknowledge their concerns about protecting their privacy.
In this context where security threats continue to increase, insurers need to be proactive in order to maintain and earn the trust of their policyholders.
Safety should be the number one focus of their digital transformation, and should focus on 2 main areas. On one hand, the security of sensitive data of policyholders and on the other hand, protection systems against attacks which have become more frequent, widespread and sophisticated, such as distributed denial of service (DDoS).
Security requirements are the same for all insurers, from the smallest to the largest, it is the number one challenge for smaller companies who may not have the resources to develop a security system and to test its efficiency.
3. Better equip insurance brokers
According to Forrester, 80% of Americans subscribe to a home or automobile insurance policy through insurance brokers. The brokerage network is the largest insurance sales channel in the US.
Through their role as agents and advisors with policyholders, brokers now occupy a more important position within the business strategy of the insurance companies.
The success of an insurer with brokers is dependent on its ability to meet the new agent and client expectations in terms of simplicity, productivity and access to more intuitive interfaces.
In this more competitive framework, insurance companies have every incentive to stand out!
4. Optimize Operations
Like all manufacturers or distribution centers, insurance companies must improve their productivity and reduce operating costs. IT enables, amongst other things, to make billing information, policies or claims available on the web, and even on mobile.
In the UK, an insurer has eliminated 20 million calls per year by launching an application that allows users to change their own insurance policy. It goes without saying that this technological advance has allowed them to save considerable sums!
In short, IT is no longer a single success factor; it has become the backbone of all activities within insurance companies.
This article summarizes the publication of Peggy Bresnick Kendler for Information Week Tech Digest March 2016.
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