Industries, across the globe, have undergone a digital revolution. But, the way people buy insurance has remained much the same for decades, until the recent COVID-19 outbreak. Since the outbreak, like everything else, people are browsing through health insurance and life insurance policies online to secure their future and life goals, thus upping the levels of digital disruption that is mostly seen in areas such as retail or and banking.
The pandemic upheaval has changed people’s outlook towards insurance. It has made people value the importance of insurance and apprehend the consequences of not having one. At the same time, it has made insurers realize the importance of being technologically innovative. More and more, smartphones and computers are putting power in the hands of buyers who want access to information as well as the tools to analyze and purchase insurance products through a variety of channels. Price transparency and easy access are also commercializing what were once complex products that needed to be sold only through insurance agents.
Simultaneously, development in technology such as AI, Big Data and Block chain are helping established insurers and insurrects to develop new ways of buying insurance, led by the needs of the consumer rather than the demands of insurance companies to sell policies. Undeniably, savvy insurance companies are using new technologies to assist the customers better. To start, more insurance companies are evading complex core IT systems by capitalizing in software-as-a-service applications, which they use for operations, distribution, HR admin, and commission processing, amongst other tasks. These tools will profoundly amend the way the insurance sector works, including with the automation of some of the traditional, physical tasks.
Insurance companies need to automate the majority of their traditional back-office operations. Technologies, like digital applications and advanced-analytics engines, are further altering operations.
As per the line of coverage, these competencies can restructure initial information gathering and document review, permitting clients to help themselves during the underwriting, servicing, and claims processes.
To arrange their operations, insurers should redesign themselves by forming interdisciplinary teams, strictly assimilating the technology and operations groups, and amassing the tools that understand the consumers’ predilections. In addition, insurers should construct skills to work with external service providers often, hire talent erudite in using the corresponding technology to augment operations, and ensure their organizational cultures embolden and cultivate experimentation. Changing the way operations work is a big undertaking requiring significant effort, but this shift would improve profitability in the long run.
Also, advances in AI (Artificial Intelligence) and ML (Machine Learning) is allowing incumbents to systematize the gradually complex tasks, including addressing all forms of customer queries. AI and ML are progressively being used to identify fraud, process automatic payouts for small claims besides offering digital self-service damage assessments.
For insurance, companies with more established technology proficiencies, a host of Internet of Things (IoT) technologies can help shrink manual interpolations in claims and pricing. Additional applications of IoT could avert insurance losses on roads, at work, and in homes and businesses by permitting insurers to achieve vigorous risk calculations using informed data.
Today, insurers need to reimagine how they engage with consumers and how they curate, consume and integrate an ecology of information and services to upsell and cross-sell insurance products and services better. To gratify today’s consumers, they must offer unpretentious products that are easy to purchase and it must alter business processes.
Technology is changing the insurance industry inside out. While it will be the trend for the upcoming years, insurers will need to restyle themselves to capitalize on the technology tools. This will let them function more proficiently and with a superior emphasis on consumer experience even in grim situations like a pandemic.
(By Prasun Sikdar, MD &CEO, ManipalCigna Health Insurance)