When one thinks of the tide of digital transformation taking over the world, the digitalization of the Insurance sector is mostly an afterthought. The insurance industry has traditionally been slow to embrace digital transformation. However, the past 5 years have shown a promising trend among large international players who are rapidly increasing their digital capabilities through partnerships with specialized technology providers and startups.
Each quarter, key insurance players are announcing new digital initiatives undertaken & their impact on the ROI.
The use of automated insurance underwriting has led to an ~80% reduction in processing time and ~90% reduction in cost per decision.
The use of AI neural networks for fraud detection has led to a ~50% increase in fraud detections and a~80% reduction in false positives, thereby increasing detection accuracy.
There is also the encouraging trend of insurance solution providers focusing on analytics, blockchain, and IoT, winning long-term deals from Insurance players.
Overall, the digitalization of the insurance industry and the corresponding business intentions driving them can be broadly categorized under:
- Insurance Operations
- Sales & Marketing
- Customer Support
Artificial Intelligence-Powered Automation At The Core Of Future Insurance Operations
The rising demand for predictive pricing and automation in claim settlement is driving the market growth for advanced insurance operations.
The top insurance operations trends that are utilizing cutting-edge solutions are:
Predictive Price & Risk Selection: Apart from the accuracy that ML-powered predictive pricing and risk selection offers, several insurers also noticed a ~50% increase in written premiums.
Faster Claims Powered By Automation: This one is a no-brainer. AI models are pre-trained on claims processing data, allowing them to accept or reject claims without any intervention from analysts.
Telematics: A recent development, IoT-enabled telematics is now providing crucial data to insurers to educate their risk assessment.
Mobile Apps: Insurers are late to the party; however, they are developing and deploying key insurance solutions through apps hoping to increase customer touchpoints and satisfaction.
Other key areas for digitalization in Insurance Operations include:
- Wearables for Insurance
- Microinsurance using AI
- Usage-based Auto Insurance
- Real-time Insurance Alert & Reminders
- Digital Insurance Cards
- Digital Claims Adjuster etc.
While Insurance Operations are certainly the core of Insurance, stakeholders are actively scouring for digital solutions in sales & marketing as well.
Elevating Insurance Sales & Marketing With Data & Analytics
Personalization, online marketing & digital onboarding are just a few areas where insurers are desperate for more digital solutions. While the past decade has indeed seen a rise in startups catering to this demand, experts note that much more can be done to deliver a more optimized and personalized experience to the customer.
The key trends that are at the focus of Insurers to meet this optimization & personalization requirement are:
Gamification of Insurance: By digital enriching the customer journey and extracting more customer engagement metrics, insurers are able to amplify the positive effects of the customer experience.
Data Integration: Finding customer data and integrating it with your in-house tools is crucial for the success of customer experience programs.
Automation: Thanks to the adoption of automation tools, insurers reported a 26% increase in close ratio and as much as a 7% increase in policy retention.
Personalized Content: Perhaps the greatest pain point in marketing, delivering personalized content for insurance customers is now a breeze thanks to the copious amount of customer data and holistic buyer persona data at hand.
Apart from the above, we have noticed an increase in demand for AI solutions among insurers to target the below focus areas:
- Virtual Assistant/Robo Advisory
- Automated Lead Generation
- Client Targeting
- Online Agent Search
- Digital Know-your-customer
- Risk Alerts and more
However, acquiring clients through sales & marketing is one thing, but ensuring that they remain loyal to your service is a completely different matter.
This is where charting intelligent customer experience comes into play.
Delivering Hyper-Optimized Customer Experiences In Insurance
By offering claims tracking, online dashboards, and virtual assistants, insurers are transforming their customer support operations.
We have curated some of the emerging trends that digital solutions providers can target in the insurance sector.
Self-Service: Giving the power back to the consumer and cutting out the middle-man is helping insurers improve customer engagement rates like never before.
Unified Messaging: Omnichannel communication has skyrocketed customer touchpoints for insurers. These channels are helping insurers engage their customers on their desired channel, track their conversations end-to-end.
Chatbots: By using AI and ML, chatbots can walk a customer through a policy application or claims process, which frees up human intervention for more complicated cases. ~30% of the customer service jobs can be automated after chatbot implementation resulting in cost savings of USD 1.02 Mn for 100 FTEs
Service providers are already creating solutions based on the above insurance use cases and winning huge deals across the industry.
Service Provider Opportunities And Engagements In The Insurance Industry
Insurance companies are transforming their traditional business models by embracing new engagements and new business model frameworks, thereby leading to accelerated capability expansion.
Below we have covered a few of these that have been trending in recent news from Draup’s Signals Cast application.
- Kasko collaborated with Neodigital to sell mobile phone insurance. End-users can manage all relevant data in one place using the myNeo online portal, making it simple to process adjustments.
- AXA UK has launched a machine learning-driven property claims tool.
- Phone Insurance player Asurion collaborated with TIBCO to reduce fraud and risk through advanced analytics.
- Rappi collaborated with Chubb to launch a 100% digital home and mobile phone insurance product.
- Chubb also launched Chubb visiON+, a global remote and connected service offering.
- Cinch Home Services partnered with GloveBox to provide home protection plans using GloveBox’s mobile and web application to advance their shared mission of simplifying home management for consumers.
Clearly, the trend of digitalization is taking over the insurance industry. Insurance solutions providers who are ready with AI, ML, Data Analytics solutions stand to emerge as winners as key players scout for optimal technologies to supplement and bolster their use cases.
Draup for Sales empowers insurance service providers with real-time insights into trending business use cases and emerging digital intentions in the insurance industry.