Insurers have made some great progress in using technologies to improve operations efficiency, enrich customer experience, and be more agile. But there are also ongoing challenges: rising cost of living, interest rates increasing, skills shortage, and competition from new entrants. These are all putting pressure on insurers to focus on how to identify new sources of revenue and protect profits, offer excellent customer experience, further improve efficiencies, and deliver products and services to customers faster. To deliver on the above priorities, insurers must focus on these five areas:
1. Hyper-personalization. Insurers have access to vast amounts of historical data. Now they’re combining that with real-time data to understand customer needs and preferences better in real time. The data collected during a customer interaction, from all channels, is helping insurers to deliver personalized engagement and recommendations on product and service offerings “in the moment.”
Personalization is enabling insurers to identify new sources of revenue, such as upselling or cross-selling, retaining customers if there is a churn risk, and offering empathetic customer services to increase customer lifetime value.
In addition to providing personalized products and services, insurers are also looking into utilizing internal and external data sources to make their customers aware of preventive measures for any potential risks. This not only helps insurers prevent or minimize losses but also provides an opportunity to expand their range of solutions and services to customers.
2. Customer service excellence. Excellence in customer service develops lasting relationships with customers and is a valuable competitive differentiator. Insurers must continue to provide integrated, seamless digital and traditional channel experiences, including via human interaction when and where required. It is important for insurers to offer the right set of tools across all channels to the customers so that they can choose relevant products and resolve any customer service requests faster. Real-time data insights should be used to provide empathetic customer services to ensure that the customer feels connected.
3. Integration with new business models. Insurers are under pressure to identify new sources of revenue and are competing with new entrants and new channels. The emergence of connected insurance, open insurance, digitally-embedded insurance, and smart contracts has provided a huge opportunity for insurers to develop new revenue streams. It will be vital for insurers to integrate and develop new business models with these opportunities to grow business and deliver customer satisfaction.
4. Moving toward an autonomous enterprise. The autonomous enterprise concept is becoming a reality due to advancement in intelligence and automation technologies. The ability to automate human-led tasks in insurance using robotic and digital process automation – as well as artificial intelligence’s ability to learn, adapt, and scale – will transform the insurance industry. With improved maturity of technologies, insurers will start applying automation and intelligence to further optimize business operations, reducing the dependence on humans performing day-to-day tasks. This will also help create better and faster customer service and free up call center agents’ time so that they can focus on high-value tasks.
5. Partnership with insurtechs. Insurtechs don’t have a legacy to deal with. Hence, they can implement new technology-led business models that can be tested quickly in the market. A successful partnership with insurtechs could help insurance companies test the technology-led business models and solutions that can help grow revenue, increase profits, and improve customer satisfaction. Several traditional insurers have started partnering with insurtechs to scale their solutions, especially in the areas of products development and distribution, customer service, and risk assessment.