4 Things Insurance Firms Can Do to Improve Efficiency, Data Use
Digital transformation is making it possible for the insurance industry to engage customers with personalized interactions that lead to products and services tailored to their individual insurance needs.
Unfortunately, the industry isn’t exactly made up of a bunch of early adopters. Most insurance organizations rely on decades-old legacy systems that weren’t designed to share data across business units or be customer-facing. As a result, data is spread out in silos, making it difficult if not impossible to integrate or contribute digital transformation strategies to streamline and enhance the customer experience.
Core system rip and replace initiatives are fraught with risk, expensive and disruptive. However, the opportunity exists to make incremental changes to legacy systems, using software to create efficiencies and automation in and between existing systems and business units.
Focus on Retention, then Acquisition
Ad spends in the industry are high. Acquisition costs range from $500 to $1,000 per customer depending on the source. It’s much more effective to modernize the customer experience, building out powerful touchpoints and spending a fraction of that to retain policyholders rather than doubling down on new customer acquisition alone.
Unifying data you already have across your enterprise will allow you to build a deeper, more personalized relationship with the individual policyholder.
Policyholders aren’t looking for another reason to interact with their insurance providers so taking the existing data, proactively using that data and reducing effort creates a personalized focus throughout the customer cycle lifecycle.
Digital-first, cloud-based platforms help insurance firms gain greater insight into customers’ portfolios, their history, unique circumstances, which will then allow them to anticipate future insurance needs and make them more personalized.
Tie Data Together
Insurance providers have been collecting data on their customers for decades, and reliable third-party sources can fill in any gaps. However, this data is tied up in individual business systems and silos, cut off from the rest of the organization. Connections can be made between these systems using automation software.
Imagine a world where policies can be built and renewed based on the number of steps a policyholder averages a day. Or risk assessments powered by wearable or embedded wall sensors that track air quality or chemical exposure. What if an insurer could detect a leaky faucet and automatically shut off the water before the homeowner comes home to a swimming pool in the kitchen?
These technologies are gaining scale, enabling the creation of powerful experiences that can be had by connecting disparate data sets with automation software.
Embrace InsurTech Innovations
Competition is good. It allows businesses to innovate and constantly improve the customer experience. Likewise, it’s critical that they distinguish themselves across an increasingly-crowded global landscape with products and an experience that customers actually want. More and more, this means digital.
Flexible, on-demand products that make coverage accessible to individuals who have been uninterested in — or unable to afford — traditional policies; new product segments, especially ones that allow for fast, digital customer onboarding; and an agile technology methodology can help insurance businesses compete, innovate faster and deliver new products and services in response to customer needs and interests.
Improve the Insurance Purchase Process
Underwriters have been the backbone of the insurance industry for centuries protecting risk, though many people predict they may be the first casualty of digital transformation.
The alternative view is that underwriters will thrive in the new data-centric world, using powerful information and analytics tools to refine their role in the insurance process.
Old, manual and slow underwriting processes will be modernized, streamlined and accelerated through greater availability of consumer data, fewer volleys with agents and brokers, and the ability to more easily consume and use that data. This will make underwriters more efficient, allowing them to expand into new markets and increase the number of policies sold while preserving profitability.
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