The insurance industry is a multi-trillion dollar market.
But much like any sector, it needs to continue to evolve to meet customer expectations. Automating manual processes and digitalizing paper forms are now necessities. But these aren’t the only digital transformation trends insurers should be exploring.
From the use of predictive analytics to maximizing chatbot usage, there are several software options available to businesses that can help modernize them so they can remain competitive, continue to meet customer demands, and attract new clients.
While the industry is already rapidly evolving and embracing technology, there are several digital transformation trends that should be on your roadmap in the next 12 months if you’re in the insurance sector.
Willis Towers Watson found that more than two-thirds of insurers claim that predictive analysis has reduced issues and underwriting expenses. This number is expected to grow significantly over the next 12 months as more companies explore what the software tools are capable of.
Predictive analytics software can collect data from multiple sources to help guess the behaviors of your customers. It can also assist in product creation as well as ensure rate changes are accurate. With so much information available in this mature industry, the possibilities are endless as to what predictive analytics can provide.
This trend is already happening now. The Internet of Things has transformed all of our lives. But it’s now getting incorporated into business models. It will play a vital role in the insurance industry when it comes to creating new products, establishing unique distribution channels as well as providing prediction and assistance to customers.
Many insurers are already using Internet of Things capabilities to service customers. However, the next phase in this digital transformation journey is to utilize the technology to generate additional revenue by monetizing data insights and reducing costs through analytics.
While the term Insurtech has been around since 2010, it’s begun gaining more relevance in the past few years. It incorporates any processes and products related to the industry and the efficiencies it brings to the sector.
Moving forward, Insurtech will power the creation, distribution, and administration of many businesses. It’s already gained the interests of venture capitalists as it has the potential to take advantage of innovative and disruptive technology. But the key to success will be successful deployment to ensure they can provide seamless customer experiences.
Many insurers and businesses in other industries utilize chatbots to enhance their customer experience. They have the capability to manage claims instantly, deliver quotes faster, and perform repetitive tasks with ease.
They also provide clients with a 24/7 service. McKinsey reported that customers preferred communicating via non-physical conversations when discussing insurance during the pandemic. It’s highly likely this trend will continue, and insurers will find more opportunities to utilize these tools to manage requests.
Cloud computing and services have already demonstrated their value to insurers. Many are reducing operational costs, improving underwriting capability, and preventing fraud from occurring. As there are no hardware requirements, businesses have discovered they can utilize services on a pay-per-use basis.
One of the key drivers to move to cloud services is the flexibility it provides. Deloitte found that speed is the primary differentiator in the industry. The technology allows companies to scale faster and automate easily with just a few clicks. It was especially essential to the success of the sector during the pandemic when many insurance staff were working remotely.
Did you know that insurance companies have an average audience size on Facebook five times larger than other platforms? These spaces are growing. LinkedIn has increased by up to 20% and YouTube by more than 50%. However, social media still remains an underutilized tool to connect with target markets.
Insurers could be using social media to educate customers on products and services. They could also be reviewing data analytics to identify interest levels and personalize messages to match their behavior. It’s even an opportunity to build a community where they can help one another.
Most insurers have only experienced the tip of the iceberg as to what artificial intelligence has to offer. The technology is currently used for claims processing and underwriting. However, there are opportunities to provide personalized experiences for customers as they shop around for a policy.
Some of the options on the table include dynamic pricing, purposeful marketing messages, and the ability to guide customers through the purchase journey. With many insurers having unstructured data sets, AI can be deployed to turn this information into valuable insights and effective initiatives.
It’s vital not to jump on any of these digital transformation trends hastily. Customers will judge insurers on their ability to meet their needs. In order to deploy these initiatives successfully, it will require careful planning and adequate testing to ensure it’s a seamless experience.
Utilizing the knowledge of a Testing as a Service (TaaS) provider can help ensure your digital transformation journey is a success. It’s often cheaper than trying to do it all yourself. Professional QA and testing services can even provide automation testing options that are repeatable and deployed outside of business hours, so customers aren’t impacted.
Rocketlab provides risk-free project support with our professional QA and testing services. We can scale in accordance with your requirements and take ownership of all your testing needs. No matter what digital transformation trend you’re exploring, we’re here to help. Contact Rocketlab today for a free consultation and find out how our TaaS offering can help you meet your business objectives.
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