InsurTech, the digital transformation in the insurance sector

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The conservative, brand- and product-centric insurance industry is facing a massive transformation in the way it does business. New players, new business models and increased customer expectations are forcing the industry to respond to digital transformation by providing an omnichannel experience for customers.

This is not an easy transformation. Traditionally built on a model where products are sold by agents and where business is transaction-oriented, insurers are moving toward an environment that is based on customer needs. Today’s always-connected consumers expect products and solutions that fit their lifestyles and life stages. They expect clarity and transparency. Gone are the days of 30-page application forms with fine print that few customers read or understand.

In this post we will talk about:

A changing insurance market
Understanding the digital customer
InsurTech, what is it?
A digital imperative for insurance
A progressive journey
Reaping the rewards of digital transformation
A new kind of player
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(h2) A changing insurance market
To compete in today’s market, where large disruptive players as well as smaller niche players are exploring opportunities, insurance products need to be simplified and personalized. Instead of agents pushing commission-based products, the focus should be one of trusted advisors providing product knowledge and customer education.

If we look at mature Asia-Pacific markets such as Australia, Japan, buy cell phone number list Singapore and Hong Kong, today’s agents are mostly independent financial advisors, known as IFAs, whose role is to educate clients and assess their needs. These agents and advisors must be prepared to respond to the new direct-to-consumer digital business models that are gaining ground. Indeed, some markets, such as Singapore, have mandated that a certain percentage of insurance products be sold directly to consumers online.

Insurers must now also be able to launch innovative products more frequently, based on different market demands. More importantly, insurers need to know their customers and respond to their expectations.

Understanding the digital customer
Current or prospective customers expect the digital experience they enjoy with the rapidly evolving consumer goods industry. They expect to receive a policy or claim handled efficiently and effectively.

Millennials and emerging Gen Z consumers want a different experience in their transactions. They expect social media feedback on what they are buying, they want offers to be simple to understand and purchase, but personalized to their requirements. They expect to have an omnichannel experience, meaning they could start looking at a product on their desktop, continue the checkout journey while on the move using their smartphone, and perhaps pay from their tablet. Therefore, the user interface needs to be standardized and mobility should be enabled.

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Customers expect to be able to take advantage of newer technologies, such as chatbots, to ask questions and get answers. And because they're used to a service-oriented experience, they're not willing to wait two weeks for a policy to be mailed to them. They want an email sent to them immediately with properly encrypted information.

Loyalty has also become a key consideration. Just a few years ago, when the Asia-Pacific insurance market began to grow, the cost of acquiring a new customer was not high. Today, that has changed. Now, insurers don’t just want to keep existing customers, but are looking to expand business by cross-selling to those customers based on their changing lives – when they get married, have children, buy houses, etc. Lifecycle-driven, personalized product cross-selling depends on having a fully automated environment that tracks the customer’s experience throughout their life and positions relevant products.

InsurTech, what is it?
The term “InsurTech” refers to innovative technologies and new digital tools developed to optimize the performance of insurance companies, provide a better customer experience and unlock the potential of advanced analytics. In a narrower sense, the definition of InsurTech means the combination of insurance and technology to bring revolutionary solutions to the business.

According to the latest reports and statistics, the global InsurTech market size will continue to grow. Revenue growth will reach the point of $1,119.8 million by 2023. Statista mentions improvements in claims processing in the US and around the world. Using new technology, insurers process claims faster and more efficiently.

New tools and applied technologies change the way traditional insurers think about their development. That is why more and more insurers are adopting InsurTech to:

Make faster and better underwriting and actuarial decisions
Delivering a better customer experience
Unlocking the potential of advanced analytics
Driving cost savings with increased operational efficiency
New technology in the insurance industry provides revolutionary solutions to fill gaps in capabilities and offerings and improve processes across the insurance value chain. For example, there are:

Predictive analytics applications for customer acquisition, risk assessment and policy development
White label platforms that allow brokers to sell short-term insurance products through any distribution channel
Artificial intelligence and data science developments for fraud detection, etc.
All innovations help to exchange data in a more modern and meaningful way.