It’s the third decade of the 21st century, and it's no secret digitalization is spreading at a fast pace. In this rapidly-evolving environment, any business needs to implement some digital transformations to stay resilient and, basically, alive. The insurance industry is surely the case.
In this article, we will show some challenges insurance companies are facing today, how digital transformation can deal with them, and why custom software is a life-sustaining feature for such companies.
Challenges of the insurance industry
The insurance industry is on the threshold of profound changes. It obviously can't survive without digital transformation. Lack of automated processes, customized software, and loads of tedious paperwork distract employees from their real job. Moreover, in today's competitive environment it is hardly possible for insurance companies to supply the needs of demanding customers. Let's have a closer look at some challenges the insurance industry is facing today.
1. New world, new customers, new demands
The Digital era imposes new conditions on our everyday life, changing the image of the insurance customer fundamentally. Insurance companies find themselves trying to succeed in a new world, for which they need to constantly maintain low-interest rates, implement new technologies, compete with new entrants who manage to lower their operating costs, and on top of that – to interact with the new customer and to satisfy his changing and growing demands.
2. Expanding insurance horizons
For the insurance industry, digital transformation trends make the traditional approach of selling protective products give place to new service-based models. To ensure resilience and prosperity, the industry has to innovate, to introduce new propositions. The main goal today is to attract and retain a customer – and that can only be driven by digital technology.
3. Digital disruption
In a market set for rapid transformation, acknowledging digital disruption is not enough, insurance companies need to find a way to act on it. It is a digital transformation that enables the industry to do more for its customers.
Benefits of digital transformation in the insurance industry
So, what advantages can digitalization offer to insurance companies? Among them are:
- Quick and easy access to insurance products online to attract more customers
- Creating customer and partner portals to offer generalized information on policies
- Personalization of customers’ information to enhance their experience
- Automation of tedious business routines to allow insurance agents to work more effectively
- Synchronization of processes to increase productivity
- Predictive and analyzing tools to improve business processes and understand customers' behavior
- Online claims management to simplify the process
- Cybersecurity to protect your business and your customers, and as a result:
- Lower operating costs
What areas in insurance can be streamlined by digitalization
Truth be told, the insurance industry has never been a pioneer in implementing new technological features. But digital transformation is surely what it needs right now because it will improve insurance processes drastically.
1. Client retention and loyalty – employees with no need to do paperwork will spend more and better time to interact with customers, and customers, in their turn, will hardly ever want to leave a company with personalized services. Self-service dashboards, for example, will offer a bird's eye view of all the information concerning performance, prices, policies, and payment dates.
2. Easier and faster claims processes – turning digital, insurance companies offer easier and faster claims management procedures. If you have a couple of photos on your smartphone, you probably won't even need to go see your agent.
3. Data analytics and prediction – with the help of cloud-based technologies allowing to store big data it is now possible to analyze information, understand consumer requirements, and adjust a company's policies to meet them.
4. Compare and buy – by creating various portals, the insurance industry makes it possible for consumers to find all the information they need in a matter of one click.
Automation in insurance. Use case: regulatory compliance
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One of the critical factors for acting on digital transformation in the right way is selecting proper use cases. One of them is compliance with the law and various standards.
Insurance companies have to comply with numerous regulations, and any amendment to these regulations forces them to reorganize their business to adapt. In such cases, no compliance breaches are allowed. There's no denying that automation helps the companies to eliminate any risk of human factor and compliance breaches by providing such solutions as:
- Up-to-date monitoring of regulatory compliance
- Name screening
- Research and validation of customer data
- Customer data security measures
- Generation of regulatory reports
The impact of just this one case is huge! Not only does it protect an insurance company from financial and operational damages, but it also frees its employees from a tiresome routine of manual operations enabling them to deliver higher-quality customer service.
Custom software development for insurance businesses
In the use case above we have observed how automation of tedious tasks may positively impact a firm's operational efficiency. One of the ways to ensure this efficiency is to implement custom software that is tailored to your business needs and requirements.
Custom insurance software is a vital tool for insurance companies nowadays as it helps boost efficiency, profitability, and safety through the latest digital technologies. Just look at some examples of how custom software can help:
- Custom mobile applications and chatbots
- Underwriting and claims management software
- Custom portals
- Website development
- Analysis algorithms and generation of statistical reports
As we can see, multiple tasks can be solved and simplified by custom software.
Conclusion
The advantages of digital transformation and custom software development in the insurance industry are evident. We just discussed what positive influence digitalization brings to the industry, how custom insurance software allows the companies to stay agile and vibrant in solving insurance tasks and described a use case that enables the companies to streamline regulatory compliance processes.
The insurance industry is growing rather dependent on digital technologies, yet it's not an underlying factor for its growth. A greater challenge for insurance companies is to find a balance between turning digital and maintaining personal contact with their customers. However, as we now see, digital transformation and custom software development are perfect allies for that.
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