Much of the commentary on the need to digitally transform, connect divergent silos and reshape internal processes has generally referred to banks. It’s no surprise that the banking sector has struggled to keep up. Banks have grown and developed in a way that conflicts with today’s need for agile, digital solutions, to the point that they risk being left behind by their customers.
Insurance companies share a similar story, yet they’ve moved slightly faster, particularly in offering facilities such as digital onboarding. It has certainly become much easier to get insured online in recent years as the active use of big data has been adopted to some degree. Progress has been made, and it would appear that, relative to banks, insurers have a slight head start.
Not there yet
The race, however, is still very much on. In fact, insurance companies may not be aware of the degree to which they face the same challenges as banks. The stubborn fact remains that they encounter similar issues and are subject to the same threats. Insurers must also retain a customer base with constantly evolving demands, and seek out any harbours of opportunity within a rising sea of digital disrupters. Just as with the banks, they have a lot to gain and a lot to lose – both at the same time.
In a digital age, the key success factor is agility. Being flexible enough to transform the back-end to meet customer demands isn’t so much a competitive advantage, it’s actually necessity for survival.
It would be unfair to say that insurers are completely unaware of what’s required. Steps are being taken in the right direction, as companies across the board are investing in change. In fact, 53% of insurers expect to increase these investments over the next 12 months.
This trend is set to continue in line with the realisation that all things digital are the key to survival. According to Accenture’s study of the industry, over 60% expect to make further investment in digital technologies and channels. Insurers have taken note and are putting their money where their mouth is, but does the pace of change match the requirements of the industry?
Acquiring the relevant knowledge
A vital tool in getting up to speed is a keen knowledge of the relevant technologies, such as biometrics or blockchain. Insurers must actively learn about them and how they can contribute to a customer-focused strategy. The opportunities they offer extend not only to UX, they pave the way for insurers to drive profitability via improved customer onboarding and retention.
The possibilities arising from these new technologies are fascinating in themselves. Insurers are already using drones to monitor the genuineness of claims inspections. They can utilise machine learning (AI) to model risk as part of providing cyber security insurance, for which there is a huge latent demand. The more innovative insurers who place themselves at the cutting edge of these technologies will not only cash in on digital, they will change the face of the industry.
The technology piece sounds like a lot of work, but is actually less complicated than it may appear. This relevant expertise can immediately be brought in-house via the right technology partner, saving insurers from the need to delve into the related specialisms.
One more reason for customers to stay
The rewards of innovation are there for the taking, yet the first step is to protect the bread and butter business. Strong digital capabilities will provide this protection. At the end of the day, when an organisation’s internal processes run more smoothly, they are better equipped to focus on end-user needs. A clever, customer-focused and seamless UX delights customers, giving them one less reason to move to the competition.
Banks and insurers need to learn, and quickly. Although insurers may have a slight head start, there’s still a road to travel. Rather than benchmarking against the bank’s digital performance, they must focus on trends specific to their industry. Complacency will not pay, but insurers have already shown a willingness to change. Now is the time to speed up that progress, bring in the right technological expertise and get there quicker than the rest. That’s how insurance organisations will secure their future: by becoming digital winners today.