Embracing Digital Transformation: The 5 Biggest Challenges For P& c Insurers
Executives expect technology to help them improve their competitiveness and customer loyalty while cutting costs and boosting growth. But to achieve a successful digital agenda, there are several hurdles insurers need to surpass. Here are the top five digital optimization and transformation challenges for P& C insurers in 2020.
P& c Insurance Insights: Digital Transformation Ecosystems And So Much More
The role of insurance is to bring some predictability, manageability, and stability into what is, in essence, a chaotic and uncertain world. After what we have all experienced in 2020, any form of normality would be welcomed.
Fortunately, at the beginning of 2020, many property and casualty insurers were focused on digital transformation to ensure continuity and management of their business processes. As the pandemic crisis hit, these initiatives were dramatically accelerated. Remote access and cloud-based solutions became essential requirements for every insurers IT infrastructure.
As we head into 2021, digital transformation will remain the number one priority for every insurer. However, here is a selection of some of the other big issues facing insurers in the next 12 months:
- Ensuring that customers are at the center of everything an insurer does
- Developing new, competitively priced products to support consumers mobile habits
- Integrating delivery channels, especially digital channels with traditional channels
- Enhancing operational efficiency and effectiveness with artificial intelligence
- Strengthening risk management with new insurance and accounting regulations
- Developing ecosystems and implementing new technologies across the insurance life cycle
- Assigning monetary value to data
I am looking forward to using my extensive knowledge in discussing how data, analytics, and technology continue to transform the insurance industry.
Overcoming These Challenges With Low
The question is: is digital transformation an opportunity or a threat? Itâs all a matter of adaptability, really. Forward-thinking companies will look at these challenges as an opportunity to differentiate themselves from their competition. And thatâs where low-code can help you.
Insurance companies like Liberty, AXA, Fidelidade and Zurich have been using the OutSystems platform to deliver next-generation agent portals and customer experience capabilities. The result is better engagement and communication with their agents and customers across any channel or device.
With OutSystems you can:
- Increase your time to value: Build customer and agent portals up to 10 times faster than your competition.
- Enhance your IT teamâs agility: Customize and configure applications based on customer or agent feedback or adhere to new regulation standards within a matter of hours.
- Break down silos: Knock down all the siloed legacy systems and orchestrate all data streams into a single viewpoint and achieve the holy grail of a 360-view of the customer using the OutSystems API layer.
- Improve your flexibility: Build a customer portal or rewrite a core legacy system. OutSystems is a highly flexible platform that grows and flexes with your business.
- Write and reuse: Reduce the need to rebuild and save time and development resources by reusing âobjectsâ across applications that require the same piece of functionality.
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Key Aspects Of Digitalization In Property And Casualty Insurance
We have already established that P& C insurance is yet another industry that undergoes changes spurred by digitalization. The blending of the insurance business and digital technologies even gave rise to a new term insurtech.
The insurance industry depends heavily on obtaining data and using it for various predictions, risk calculations, etc. For this reason, its first and utmost need is data mining solutions combined with processing and analytical means presented by Artificial Intelligence and Machine Learning. Let us examine a few exemplary aspects of use for digital technologies in this area.
What Does Digital Transformation Look Like For P& c Insurance
P& C insurance technology trends are looking towards two vital areas: Telematics-driven Usage-based Insurance , and Conversational AI. Both have a strong presence in todays digital environment but are underrepresented and underused in P& C insurance. But more importantly, both of these technologies enable insurance companies to customize and communicate with a growing number of customers in a digital era.
These two technologies are no longer considered optional within the customer experience. They are required to create a robust, self-served, and immediate positive encounter for current and prospective customers. Even if a customer wont opt in to UBI, not offering it as an option can create a perception of a P& C carrier that is not on par with their competitors. And we all know the customers perception is their reality.
The digital technology transformation allows you to provide an excellent, competitive, if not differentiating, customer experience. Your P& C insurance offerings become more robust, more customer friendly and more cost effective.
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Be Where Your Customers Are
You need to meet your customers where they are, and where they are is online. Your can flow across multiple channels, following customers from Facebook to Twitter to Linkedin.
The system can also send email reminders, ensuring that your customers pay and renew on time, and it can look at the pattern of their claims, behavior, and overall life and recommend any changes to policies or new policies.
You should be careful, of course, not to be “creepy” with your marketing and remarketing, but at the same time, customers will appreciate knowing what you have to offer that might be an upgrade on what they already have.
Insurance Carriers Need To Be Equipped For Current And Post
The pattern of insurance claims has also gone a change with fewer auto claims and an expected rise in workers’ compensation claims.
In addition, while the pandemic looms, there will still be a demand for property and casualty claims as the pandemic will not eliminate the risks from natural calamities like hurricanes. For managing this, the insurance carriers need new ways to optimize and digitize their operations.
Guidewire InsurancePlatformâ¢ provides the P& C standard using which insurers can optimize their operations, be truly digital, use data as an asset, embrace insurtech, and simplify I.T.
Guidewire offers core-back-end software for property and casualty insurance carriers in the U.S. and worldwide. It has three top-notch products that help insurance companies to minimize their I.T. workflow and to ease the transactions, such as
- Claim center
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How To Find P& c Technology Solutions That Drive Digital Transformation
In 2018, insurtech investment stood at $4.9 billion. For the first half of 2021 alone, that figure stands at $7.4 billion. What the P& C customer base expects of their insurance providers has clearly not gone unnoticed.
The property and casualty insurance industry is getting used to disruptive change. Carriers face fluctuating client demands. Cybersecurity and climate disasters are growing in frequency. Small commercial insurance has far more competitors than it used to. Price wars no longer yield the same competitive edge.
Of all the many challenges gripping P& C insurers, digital transformation is providing the most significant benefits. Letâs take a look at the advantages and trends that deliver a competitive edge and how you can find the right P& C technology solution for your digital transformation.
Demo The P& c Technology Vendors That Meet Your Criteria
Invite the top 5 vendors to give your stakeholders a demonstration of the software solutions you are interested in.
Take note of any vendors who put up resistance to giving a demo. Software salespeople are not used to a rigorous vetting process and want easy sales quickly. The tactic will be to sell you the most impressive and popular features. Donât fall into the trap. You are not there to be dazzled, you are there to see how well their products satisfy your needs. Be prepared to ask the hard questions if the answers werenât provided in the demo.
P& C Technology Vendor Questions
- How does your product meet our priority requirements?
- Are there post-purchase costs?
- What features are you working on that could impact our future?
- What after-sales support do you provide?
- Is this compatible with your current tech stack?
- What training is required?
- What is the pricing structure and is it flexible?
No matter how great the pitch is, you are there to find the perfect solution for the end-users and other stakeholders. Conduct thorough due diligence after you have settled on a favorite and ensure that your business needs are met.
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What Will The Competitive Environment Look Like In The Next Five Years
Many industries are already feeling the effects of changing consumer preferences, the emergence of would-be disrupters, and shifts in distribution. As these trends continue, P& C insurers in particular are at risk of seeing their investors pull funding and reallocate their assets to sectors that are better prepared to capitalize on digital transformation. The future for the P& C industry is also likely to include increased mergers and acquisitions activity as traditional carriers seek to expand their footprints and accelerate their digital efforts by buying insurance technology startups. Amid rapid technology advances , increasingly stringent regulations and new partnerships, P& C insurers looking to remain viable must understand and align their leaders to a shared vision of the future that puts into perspective the need and urgency for digital transformation. Finance leaders will play a critical role in facilitating these discussions, and shaping the role that their organizations will play, as the strategic choices that each firm might make will be determined by where they choose to deploy capital, and the needs of their investor base.
Were On The Cusp Of Profound Digital Transformation In P& c Insurance
Although customer expectations might be that P& C insurance companies tend to be laggards when it comes to digital transformation of the insurance, it only takes innovation from one or two players to adjust those expectations and force all other companies to adapt or fall behind.
Furthermore, the needs of consumers are changing when it comes to insurance.
Younger generations are driving less and buying homes later or not at all, so products need to reflect these new ways of living while still maximizing income for the insurer. If traditional insurers dont meet these needs, consumers are more likely to turn to upstarts who have done a better job of figuring them out.
Covid-19 spurred insurance companies into digital action
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New Type Of Customers
Customers between the ages of 18 to 35 are changing the way business is carried out. Online shopping experiences have changed customer expectations. They want their products, their services and their communications to be instant, self-serviced and personalized. With the prevalence of digital devices, customers are used to receiving near instant responses to their inquiries. They are accustomed to making choices and finding information independently, on a screen of their choice and often only seek human intervention when there is no other option. Additionally, they look for products and services that meet their specific needs. The traditional methods of requesting insurance services are no longer enough.
In addition, older established customers practices of querying an agent for information are also altering to reflect their use of digital devices. Experiences ordering groceries and restaurant food online and refilling prescriptions from their phones have changed the way this demographic interacts with technology. The speed and efficiency of working on a digital platform is modifying their behavior to become more digitally savvy. Without digital transformation of your P& C insurance journey, your ability to meet your customers needs will be too slow and cumbersome to be effective.
How Do We Need To Evolve Our Business Model To Meet The Needs Of The Future World
As P& C companies develop a more comprehensive understanding of how the future environment and customer demands will be different, they must work to determine how those insights should affect the way they do business to meet those needs. For example, increasingly, people are looking to use new technologies and predictive analytics to prevent damage to their property, rather than simply accept the loss and file a claim. Forward-thinking organizations might choose to see this as an opportunity rather than a threat and move into market adjacencies where they can create and capture value by focusing on proactive protection. The manifestation of this shift in thinking is inherent in the partnerships between traditional insurance companies and Google Nest, wherein many providers offer incentives and discounts for owners of Nest Protect who voluntarily share information that proves their system is operational and functioning properly. Forward-thinking CFOs must take a portfolio lens and think carefully about the portfolio of legacy and new business models and the necessary transformation of their own cash flow, earnings and balance sheets.
At The Point Of Claims
Customers go years dutifully paying for insurance without ever filing a claim. The average homeowner files a claim every nine or 10 years for car owners, its a mere every 17.9 years.
Unlike other service providers that have more regular interactions with customers, insurance companies have limited opportunities to make or break their customers opinion of them.
A First Notice of Loss process that requires customers to go through multiple channels , fails to update customers as to the status of their claim, or makes it difficult to send supporting information at a later time will tarnish the customers perception of their insurer.
After they reach a settlement, these customers who are left with a bad taste in their mouth will be more likely to actively search for a new provider or be receptive to other providers marketing efforts. Prominent digital-first insurance companies such as Lemonade that boast a minutes-long, paperwork-free claims process are just waiting in the wings for these disgruntled customers to show up at their doorstep.
Unfortunately, customer churn is a significant expense that cant simply be recouped via new customers.
As Lynn Thomas, president at 21st Century Management Consulting observes, The insurance industry has the highest customer acquisition costs of any industry. It costs seven to nine times more for an insurance agency to attract a new customer than to retain one.
Grow Business Through Great Experiences
As observed in a survey from Ernst & Young, â40% of consumers decide to continue insurer relationships based on the quality of the experience.â Insurers are expected to deliver omnichannel solutions across mobile, web, chatbot, and call centers, providing seamless experiences wherever they are and whenever they want.
But thatâs just part of the challenge. Although agents and brokers play a crucial role in the insurance business, most agent portals have poor experiences. In fact, the 2019 J.D. Power U.S. Independent Insurance Agent Satisfaction Study states,
“Overall independent agent satisfaction with personal lines insurers is 735 . For commercial lines, that score falls to 720. These are among the lowest overall satisfaction scores in any business study currently conducted by J.D. Power, lagging even financial advisors .”
In a competitive market such as insurance, where agents and brokers’ performance is critical for acquiring new customers and keeping existing ones, executives have a new mandate: optimize the experiences of their teams. Easy-to-use and friendly portals must be at the top of their agendas.
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How Insurgrid Digital Technology Can Help Clients Get More Sales
InsurGrid provides a better client experience by making it effortless to share dec pages. It helps your sales people convert more leads and encourages multi-line accounts that have much higher retention .
Try InsurGrid today to find out how we can help you make more sales, earn more money, and offer a better experience to your clients.
What Is Digital Transformation
Digital transformation is best described as implementing new technology to improve every aspect of your agency. Digital transformation is, for example, not just having a way to send claims through your website and stopping there.
Digital transformation initiatives can modernize and streamline everything you do. Perhaps you can use machine learning to spot unusual claims patterns or to aggregate policyholder data and allow you to smartly set premiums.
It is an entirely holistic process, ideally using high quality insurance agency management systems to bring together as much of the process as possible, without having to use a lot of siloed software. Many older systems put claims in one place, premiums in another, and don’t connect multiple policies held by the same person.
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Using Olive To Evaluate P& c Solutions
Insurtech investment rates and customer buyer behaviors have demonstrated exactly where the P& C market is going. Digital transformation is a constant cycle and to stay ahead of the market, insurers need an efficient tool. We understand that you donât have time to go through the full-length process every time an innovative technological change is required. You need an efficient, unbiased software selection process, and thatâs exactly where Olive comes in.
Olive is not influenced by vendor bias, quick sales, or short-sighted change. Olive is a digital transformation tool that empowers you to make informed decisions that efficiently hears the opinions of all necessary stakeholders. Once the needs of your business have been gathered, we match the best-fit vendors to solve your headaches. You donât get a list of vendors who have paid to be seen. You get vendors with a percentage rating and visual representation of how well they fit your needs.
Olive is here to disrupt the market because software salespeople have had the power for too long. We think you should be fairly equipped to find software solutions for your future easily. Olive gives you the platform to make confident software decisions with the full support of your enterprise. Get in touch if you need help finding P& C Technology solutions for your enterprise, or clients!
Ushur Enables Digital That Differentiates
Ushurs intelligent insurance automation platform enables P& C insurance carriers to offer valuable omni-channel capabilities to provide their customers with a consistent superior experience regardless of their service interaction involving a policy, bill or claim.
Services like our Invisible App allow P& C insurers to create dynamic customer or claimant engagements in hours with no coding experience needed. Improve and automate the insurance customer experience, lower costs and give customers the attention they demand in todays changing and increasingly competitive market. Our no-code platforms facilitate automation workflow development by business analysts, allowing IT teams to focus on complex technical projects also key to a carriers success.
Ushur is leading the insurance industry into the new digital age, one that benefits both insurers and their customers alike. We are on a mission to transform how insurance carriers do business. Our easy-to-use platform is the perfect match for any insurer in any segment: P& C, Life & Accident or Healthcare.
The future of the insurance industry is altering and developing into new digital territory every moment. Be a part of that future. Exceed expectations and act now.
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