3 trends in insurance: artificial intelligence, digitalization and agency sales
Technology and new sources of data are fundamentally changing our economy and society, and promise to transform the insurance industry. According to research by Beinsure Media, digitalization is changing the role of insurance: from risk protection to risk prediction and prevention. The foreigner analyzed the report and selected the most important.
The risks covered by insurers and the way claims are underwritten, distributed and managed are also changing. In an increasingly digitized world, some risks will become less frequent, while others, such as cyber security, will gain importance and others may cease to exist.
Rapid advances in technology, ongoing workforce shortages, and rising customer expectations for experiences of all types have transformed the insurance industry over the past few years, forcing insurers to evolve their service strategies and business processes accordingly. It will no longer be possible to work as before; those who don’t adapt risk losing customers and market share, analysts say.
The insurance business is one of the most competitive industries and faces many challenges. We are confident that these challenges are not only caused by changing customer expectations and behavior or the emergence of other technologies, although this is also a growing concern.
Examples of such “revolutionary” companies include InsurTech start-ups and, over the years, initiatives by technology giants – Google, Apple, Facebook, Amazon and Alibaba.
It’s time for traditional insurers to embrace innovation, use technology to adjust their strategies for future success.
There are three key areas to focus on as strategies and roadmaps are planned for this year and next year.
The use of artificial intelligence is growing
Artificial intelligence in insurance is increasingly being used to improve the customer experience while increasing the efficiency of insurers and teams. Chatbots that can intelligently guide customers to an available agent are a popular use, but AI can do much more. For example, when a policy is issued, insurers can apply for data processing.
Artificial intelligence for background investigations and more thorough monitoring for “red flags”. AI is also becoming a valuable tool from a risk perspective, providing a more holistic view of customers and helping to determine whether they have been involved in fraud.
The field of artificial intelligence is developing so quickly that even experts have a hard time keeping up. So how can the rest of us cope with the dramatic changes that are coming?
To get a clearer picture of the state of artificial intelligence, a team led by Stanford University compiled the first index to track activity and progress in the field.
The AI Index begins by telling readers that “without adequate data to reason about the state of AI technologies, we are essentially ‘flying blind’ in our conversations and decision-making around AI.”
The first annual report is part of Stanford University’s Centennial Study of Artificial Intelligence, a 100-year project dedicated to exploring the impact of artificial intelligence on human life.
Insurers are increasingly prioritizing experience to differentiate their products. Those who invest in digitally optimized service and support tools will be well positioned to improve customer satisfaction, retain top talent, and increase market share this year and beyond.
And when it comes to job hunting, studying artificial intelligence can prove beneficial as employers increasingly want people with skills in the field. Beinsure analysis shows that the number of jobs requiring skills in machine and deep learning, the two main components of artificial intelligence, has more than doubled in the past year.
A significant number of these jobs are created by startups. These companies can grow thanks to the funds invested by investors. And investors are optimistic about AI.
Digitization of insurance customer service
The insurance industry is familiar with the new social reality taking place. Customers, policyholders and employees of organizations are becoming increasingly digital and, above all, more and better informed. Adapting to and meeting new customer expectations based on (see overview on The Future of Digital Transformation in Insurance), demand for new services and products, and improved experiences are probably the industry’s biggest challenges.
Digital transformation must be based on defining a strategy and roadmap, and then ensuring the effective implementation of digital initiatives that improve and adapt key aspects of business value chains.
These initiatives must take into account the environment, but above all they must adaptto the level of digital maturity of the organization and business model, which is defined by the types of customers, distribution channels, products/services sold, internal processes, organizational structure, culture, history and individual characteristics of the brand.
More than 50% of customers consult online channels, insurance company websites, comparison platforms and social media before purchasing an insurance policy. With the onset of digitalization, entities with traditional relationships with customers through agents and brokers, or direct channels such as call centers, are focusing on digital channels, especially those that use mobile devices, social networks or the extension of new online functions to provide comprehensive solutions for multi-channel customers.
However, the challenge is to create an integrated customer experience at all points of contact with the company (customer journey) by making the necessary adjustments to processes, products and services, as well as by incremental change management.
This improved customer service impacts three key aspects of the business:
- More insurance contracts
- Resistance to changing the insurance company
- Become a product thought leader
The new expectations of digital customers—instant response, new consumer habits, and changing schedules—result in the need to create infrastructure, processes, and efficient internal capabilities that can quickly meet customer needs.
To implement these changes, insurers need to understand how their customers interact with the company through the customer journey and impact on back-office processes in order to optimize the organizational and operational structure, reduce costs and offer personalized yet profitable insurance products.
Compared to traditional data analysis systems that use socio-demographic criteria, bulk processing and advanced data analysis will allow companies to develop new products and services that are personalized and profitable, and focused on customer knowledge.
The ability to develop an offer in a flexible way that takes into account the real needs, preferences and lifestyles of customers will allow insurance companies to strategically position themselves according to customer requests through multiple ways to connect with the organization, thereby improving the customer experience. and business impact.
A noticeable shift in customer preferences towards online purchases of insurance services on the Internet has led to an increase in the digital transformation of the industry. As insurers work to modernize their technology, more will also look to modernize their approach to customer service.
Expect more insurers to invest in the tools needed to meet customers where they are in the digital realm to help answer questions and resolve issues as they arise.
By taking a digital approach to customer service, help desk representatives can meet their customers where they are and communicate with them in any method they prefer, including chat, voice and video, using CoBrowsing as needed to guide their. Platforms that provide a seamless, cross-channel experience can significantly increase customer satisfaction, reduce churn, and increase conversions.
The experience of an insurance agent has become a strategic priority
The current level of experience of agents leaves much to be desired, increasing the churn of insurance agents to 30-50% – one of the highest rates among job types.
Just as there is an urgent need to redefine the customer experience, there is also a great opportunity to grow the agency network. Insurance agents are an important sales vehicle for insurers and need access to a wide range of information related to policyholders, policy applications, underwriting updates, and billing and payment information.
Digital technologies that help insurance agents become more productive can increase agent loyalty, accelerate sales, and ultimately increase overall business for both insurers and agents.
84% of agents don’t think their tools help solve customer problems. Agents use an average of 8 different applications to answer customer questions. What’s more, in an exclusive agent-only survey conducted by BenchmarkPortal, 63% of agents said that customer inquiries are becoming more complex, but 64% of them don’t have the tools to manage them during customer conversations.