Undeniably, technology is the game-changer causing changes in business sectors ranging from the finance, banks, services, and even health industries. It is digitizing various processes. Today, Digital Ventures is looking into the changes that are affecting a business much related to our better living, the insurance business.
In the report, Digital Ventures researched and collected data about “Digitizing Insurance”. We will share on the overview of the migration of the insurance business towards the digital era. Enjoy our summary.
Key technology investments in the insurance business
For the digitize process to be tangible, insurance firms largely invest in various tech research. A 2017 survey from PwC and EY reveals that key technologies that insurance companies look to invest and find significant can be categorized both by similarities and differences to that of the financial business and other industries.
Similar to other industries and the banking sector, insurance companies find that data analytics as well as expanding sales channel and services via mobile channels are important technologies. These technologies are significant to insurance companies at over 84% and 58% respectively.
Under the tech category, next in line following the two first aspects, insurance businesses want to invest in robotics and Artificial Intelligence. A Deep Tech that, once combined, will bring about advanced automation which can optimize the value chain in the insurance business. This is true for the underwrite or claim settlement process.
Insurance business trend and innovation throughout the value chain
Similar to other businesses, the insurance sector is attracting InsurTech startups. This is where technologies create solutions to solve problems at every stage. Also, this trend expands the market, reduces cost, and increases customer-base.
- Product Dev: There are new solutions such as On-demand insurance (real-time application and notification of results) and Pay-as-you-go insurance (“Pay as you live” is insurance premiums that match the actual driving time or calculated only when clients are on board the plane). Interestingly, new solutions are more personalized, have flexible premiums, and offer conditions that consider consumer needs and income.
- Marketing: Insurance marketing in the digital era turns mobile devices to sales channels, claiming services, or even advisors. Both sales via D2C (Direct-to-Consumer) or agents must deliver faster, simpler, and more transparent experiences to clients. Chatbots become advisors along with insurance management tools that clients can access online. This will require good user experience design combined with the Robo-Advisory technology.
- Underwriting: This process will clearly be disrupted by Big Data and AI. This is due to better accessibility to client data and the possibility to filter specific data needed for the assessment. This will be used to improve the underwriting process in terms of assessment time (before notification) and coverage amount. For instance, for the coverage amount, the prevention-based method will be combined with present-day schemes. For example, insurance firms can lower the premium according to the client’s behavior, fitness routines, and activities. Moreover, Big Data and Artificial Intelligence can precisely filter and calculate the coverage amount that will best match consumer needs.
- Claims Management: This process is a pain point in the insurance business. When clients are faced with unexpected events, they demand the best and fastest assistance. The “instant claim application” is a trend that can be accomplished via technologies and innovations. IoTs, mobile device, and the smart contract can quickly and precisely transfer data under different conditions. Chatbot and Robo-Advisor are needed for automation while machine learning will involve identity verification or fraud prevention.
- Financial Management: As the insurance business is closely related to money, therefore, FinTech can be useful for portfolio management to help increase profit. Also, they can help manage risks from fluctuating or unsteady expenditures. Required techs are similar to that of the financial sector which are AI, Big Data and cloud computing.
Six ideas on innovation for digital age insurance businesses
Not only should we get to know and update technologies, but insurance businesses shall put these techs and trends to good use. Digital Ventures has six suggestions as below:
- Simplify life insurance. Companies should offer terms and conditions with transparency and flexibility. Also, in order to win clients, the coverage amount should coincide with their needs.
- Go directly to consumers with mobile. Insurance firms can reach clients through their own channels without having to rely on representatives or agents. This way, data analysis is precise, response time decreases, and processes are transparent.
- Invest in wealth and health. When underwriting and managing risks, insurance firms, especially with life and health insurance products, should consider both WealthTech and HealthTech options.
- Create both online and offline sales experiences. Today’s consumer journey integrates online and offline channels. Therefore, marketers shall highlight both channels and learn the journey of each product.
- Leverage social media. Access to social media is not only beneficial for marketing, but consumer behavior on social networks such as text or photo posting patterns can also be considered in the unwriting process.
- Focus on protection. Using IoT and MedicalTech (BioTech) to motivate consumers to change their lifestyle or to collect real-time behavior and health data can help to provide accurate risk evaluations. This will lead to product designs that fit consumers’ price and coverage concerns.
We hope that this blog has shown readers how digitization will further affect the business sector. The insurance business is among the many sectors that shall be affected and will encounter adaptations. Digital Ventures have more stories about digitizing insurance from different perspectives. Follow us at http://dv.co.th/cvc.php