Technology is rapidly evolving and many insurance organizations are faced with the challenge of keeping up. Profitable and sustainable growth is the top priority for an insurance company today, and to enable this, major insurance companies are taking every possible step to implement innovative practices and the latest technology to improve business processes and streamline business processes. legacy applications.
“Digital natives” are and will continue to dominate the workplace, which has huge implications for agents and brokers looking to engage with customers and grow their businesses. As the millennial generation matures and reaches its peak, purchasing power, digital and more automated ways of doing business will become a critical part of daily workflows.
From the rise of mobile users and cloud-based technology to social media engagement, a Deloitte study of 2016 tech trends for insurance agents explains that insurance agents are finally realizing the need to be more agile, efficient and accessible to serve today’s customer.
To add to this, there is a challenging regulatory environment that continues to add more regulation to streamline the insurance sector. A recent Deloitte report describes that such regulations are no longer one between state and federal entities, but rather a hybrid of state and US government regulation of insurance entities to ensure efficiency and compliance with procedures. state and federal standards.
As a result, insurance agents are not only feeling pressure to digitize their workflow, but must also streamline business processes to make the cost of doing business more efficient and in line with these regulations.
While 63% of insurance companies report they are ready to move toward more digital practices, only 23% of these companies are ready, reports a joint study by Forrester and Accenture.
To accelerate this process and ensure a successful transition to digital workflows, there are a few key trends that insurers are and should embrace.
Modernization of legacy systems to achieve operational efficiencies: With operations spread across different geographies, for decades, insurance companies have been inhibited by legacy systems, outdated technologies that generate high maintenance costs. The proliferation of modern technologies such as mobile and cloud computing has changed the way organizations do business. Rather than being left behind, it is time for insurance companies to embrace the latest technologies and modernize their legacy platforms to achieve operational efficiencies while considering consumer flexibility.
Adopting on-premises and cloud-based infrastructure: IT teams in the insurance industry struggled with what information regulators allow to be stored in the cloud vs. on the premise. Many insurance entities use 40-year-old management technology designed to manage the claims process, according to a recent TrustMarque report, which is hampering innovation. Furthermore, insurance agents are far from instantly replacing such mainframe technology.
As the insurance industry embraces a more streamlined workflow, we can expect a significant increase in the use of technology that can be operated via hybrid cloud and on premises, ensuring maximum flexibility for clients and strong compliance with ever-changing government regulations. within the insurance environment.
Artificial Intelligence: Artificial intelligence (AI) is helping insurance companies develop systems that can perform tasks that previously required human intelligence and manual processing. With the advent of AI in the insurance industry, insurance agents can now count on sophisticated systems for precision, efficiency, and seamless automation of existing customer care, underwriting, and claims processes. In the coming days, Artificial Intelligence will be more disruptive and will be used to identify and assess emerging risks.
Blockchain – The insurance industry is also focusing on Blockchain technology to power the future. Through its distributed ledger, smart contracts, and non-repudiation capabilities, it can act as a shared infrastructure that can transform multiple processes in the insurance value chain. Not only will it simplify paperwork and improve auditability, it will also help the insurance industry reduce expenses significantly. It will also reduce the cases of valuables related to fraud. Some of the major players in life insurance have already taken steps to experiment with blockchain-based solutions across the value chain. John Hancock, for example, is evaluating a proof of concept for employee rewards.
Predictive analytics with machine learning (ML) – By using predictive analytics with ML, insurance companies can unleash the power of intelligence to process complex variables from data sources into relevant data for actionable insights. This would help them predict what might happen next and what the best decision should be. As far as the insurance industry is concerned, predictive consulting is offered to clients to facilitate 24-hour customer service.
Heavy reliance on IoT and Big Data – The insurance industry is a data-driven industry that generates myriad data, both structured and unstructured. Thus, insurance companies rely on the Internet of Things to accumulate more and more data related to the behavior of their customers.
Big data analysis helps insurers make crucial decisions based on the analysis of accumulated data. For example, accumulated data from wearable health devices enables insurers to monitor customer activity to offer discounts for customer healthy activities.
Adoption of mobile devices to offer services on the go: With the increasing use of smartphones in both developed and emerging economies, the insurance industry is constantly implementing mobility as part of its business strategy. Through mobile apps, customers can easily request a policy quote, locate an insurance agent, calculate retirement income or premiums, and store policy data. Insurers simply cannot ignore the benefits mobile apps offer in brand building. With the growing consumption of the Internet through mobile phones, customers can interact through social networks and other different modes of communication.
Offer innovative and personalized services through digital touchpoints: Insurance industry clients are driven by multiple policies and their premiums, and the attrition rate is high as they have multiple options to choose from. To retain their clients and build deep relationships with them, insurance companies are investing in customer engagement activities using various digital touch points such as the web, mobile devices, social media, email, etc. For example, insurers are helping clients develop and protect their assets, such as homes, vehicles, wealth, and health, usually by partnering with other service providers. These digital services are provided through the development of a digital strategy.
Automation of regulatory compliance requirements: Since insurance is a highly regulated industry, insurance companies must incorporate regulatory compliance into their business processes. Additionally, they need to quickly keep their processes in compliance with new regulations as they are enacted. Regulatory compliance automation helps insurance companies with immediate access to information while ensuring that processes are followed consistently, minimizing the risk of non-compliance. Automation also provides the information required for reports and documentation on a specific task performed. Modern systems facilitate regulatory automation while allowing change in regulatory compliance over legacy systems.
These were some trends that can act as catalysts for the insurance company to work more efficiently and reach more clients.
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