Insurance Revolution- How Digital Transformation is Reshaping the Industry

The insurance industry is undergoing a digital revolution driven by AI, Big Data, and other intelligent technologies. This blog explores the trends and future of insurance, explaining how insurers can leverage these advancements to offer a more efficient, personalized, and customer-centric experience.

This blog aims to inform insurance companies about the impact of digital transformation and guide them on navigating this critical shift. Readers will gain insights into key growth areas and strategies for success in the digital age.

Businesses across the globe are at the cusp of a major digital disruption and the insurance sector is no exception to this evolution. With over 5 trillion USD in gross insurance premiums, the global Insurance industry is on a digital journey to reshape the future of how it interacts with its customers to provide them with a differentiated experience. According to recent research by EY Insurance Consumer Research, more than 80% of customers are willing to use digital and remote contact channels (including web chat, email, mobile apps, video or phone) in place of interacting with insurers via agents or brokers. Here is a Coforge Viewpoint: How Intelligent Digital Technologies Will Reshape Insurance Operations.

The drastic shift from traditional and orthodox system frameworks and operations can be unarguably attributed to the influx of intelligent technologies such as Artificial Intelligence, Machine Learning, Big Data, Blockchain/DLT led smart contracts, and widespread usage of cloud systems. 

Enable. Scale. Grow — Navigating a Successful Path for Digitization

For insurers to thrive in the technology-driven market, they will need to move further with an agile and strategized approach. Mapping the customer journeys must be the elementary step followed by creating interdisciplinary teams to facilitate faster decision-making. A deep understanding of the legacy and potentially viable digital systems is crucial to establish a sustainable architecture to work upon.

Adoption, training, and seamless integration should be ensured before scaling up digital operations. Investing in advanced technologies, developing new talent strategies, and updating organizational capabilities should be initiated gradually through encouraging experimental work culture within the IT teams.

Key Areas of Digital Growth for Insurance Companies

Insurers looking for a full-fledged digital transformation must know the most critical insurance areas that will undergo a transformation and the impact of the digital ecosystem on them:

Simplified Micro Insurance: The traditional functions, where manual risk assessment of customers was undertaken, resulted in the loss of time and huge admin costs even for small insurance cover policies. Now, the power of data analytics along with smart automation can aid faster risk assessment and claim settlements. This will facilitate quicker underwriting of micro policy covers, making it possible for the insurers to offer affordable policies to the customers.

Streamlined Underwriting Process: The automated decision-making processes will enable the insurers to steer through volume work with the advantage of offering the customers with real-time or almost real-time data analysis and predictive analysis. Their role will gain more depth because of this and will shift from mere risk assessors to reliable advisors to manage the risks better and avoid losses.  

Touchless Claims Will Become A Reality: Thanks to AI & ML along with intelligent data engineering, the insurers will be able to embrace touchless claims enabling the purchase of policies, first-notice-of-loss (FNOL) to the settlement without any human intervention, providing enhanced claim efficiencies and greater customer experience.

Growing Prevalence of PCWs and P2P: The surge in the number of price comparison websites (PCWs) and peer-to-peer insurance (P2P) will result in greater commoditization, thereby making customers more price sensitive. It will lead to improved pricing and operational efficiency of the insurers and better options for the customers.

Preference For Personalized Pricing: Leveraging telematics will allow insurers to obtain customer-specific risk assessment data, eliminating the need to depend on general population data and allowing the creation of person-specific cover policies. For example, telematics will collect real-time information about an individual’s driving habits to inform the pricing of auto cover, while data from wearable devices such as fitness bands and apps that monitor adherence to medical treatment will allow an insight into creating an appropriate life cover.

Improved Cybersecurity: The advent of digitization in the field of cybersecurity has come a long way. Highly secured and innovative solutions are being increasingly offered to counter the mounting cyber-attacks. Greater adoption of digital technologies will lead to the development of more efficient internal IT and customer database security systems facilitating a secured financial services environment.

IoT Managed Underwriting/Claims: Through connected systems, the insurers will have access to data provided by all the connected equipment, “smart” facilities, people equipped with wearable devices, and telematics from vehicles. This will enable the underwriters to directly observe the real-world behaviour of the person, machine, or an organization, allowing proactive and real-time input and faster underwriting/claim settlements.  

Better Processing of Claims: Robotic Process Automation of repetitive tasks will enable the insurance carriers to process high frequency, low-cost claims faster and more effectively, curtailing down the operating costs, allowing efficient decision-making, and improving customer experiences.  The manual quality control process of customer claim calls checks for less than 1% of the recordings, which is insufficient. Through automation, the entire recording can be assessed to identify improvement areas in claims processing.

Augmented Customer Experience: According to Worldwide Insurance Survey by EFMA only 34% Gen Y customers reported a positive customer experience with their insurance provider. Today, the customer is looking to access the data with just one click and across varied channels, and the digitization of services will allow the insurers to offer seamless omnichannel experiences to the clients obtaining greater customer satisfaction, which is the ultimate goal of any business.

The Key Takeaway

As the insurance sector witnesses the massive digital disruption, it is important for the future-driven insurers to brace themselves for a path breaking evolution to stay relevant and competitive in the digital world. In order to become a fit-for-future insurer carrier, you need a reliable partner that will help you reinvent your legacy systems and build strong digital pillars and a harmonious ecosystem to help you take that digital leap into the future.

The Coforge Advantage

Coforge enables the insurers to innovate at the pathbreaking intersection of domain and technologies by offering advanced, unparalleled, and committed IT services.

Our vision, as leading Insurance services provider, is to be an innovation catalyst perpetually growing our competencies to develop super-charged agile systems and modular processes for insurance companies. We are focused on helping the insurers create alternate distribution channels, leverage seamless telematics, grasp unexplored and potential niche markets, offer best-in-class broking services, amongst other innovative solutions driven by intelligent technology at work.

With a solid foundation laid upon the principles of most future-oriented and advanced technologies, we have gained outstanding domain expertise in co-creating and deploying multi-channel Insurtech solutions.