Would you like to have more satisfied customers and expand your portfolio while increasing your insurer’s revenue? We tell you how to achieve digital transformation.
Digital transformation in the insurance sector consists of the implementation of technological tools such as Big Data, Artificial Intelligence, and Learning Machine with the aim of
More and more companies understand the impact of implementing new technologies developed for the sector. In this article, we tell you how your insurance company can offer personalized quotes, reduce management times and provide a simple and transparent experience to all users.
Challenges of Digital transformation in insurance
The insurance industry is one of the few that, until recently, marketed the same product for decades. However, with technological progress, companies are forced to undertake a change towards a digital transformation that allows them to adapt their offer and quality of service to the current times.
This is how the “InsurTech” sector appears on the scene, combining new tools and technologies developed for insurance companies. Within which we find Big Data (management of large volumes of data), artificial intelligence and Machine Learning (automatic machine learning). Each of them plays an important role in this process of digitalization of insurance companies.
Digital transformation in insurance companies influences all stages of the process while helping to generate new products and services. This makes it possible to improve the quality of the external (policyholders) and internal (agents and brokers) customer experience through efficient omni-channeling. Offering them both a simpler and more effective experience and an agile response to requirements.
Digital transformation: How it influences the customer’s decision to purchase insurance
Does digital transformation have a bearing on the weighting of one insurer over another? In March 2019, the Spanish Organization of Consumers and Users (OCU) published the results of a survey of almost 13 thousand people. Some of the aspects they addressed in the study were: what determines customer loyalty with insurance companies and what factors influence their decision when changing insurers.
50 % of policyholders
indicate that they do not switch companies
due to inertia or resistance to change.
Source: OCU (2019)
So, what are the factors that influence when evaluating a change of company?
71 % of policyholders
searched on the Internet
before taking out a policy
Source: Genesys (2017)
The impact of the Internet of Things (IoT) on the digital transformation of the insurance industry
The IoT (Internet of Things) refers to the connection of everyday objects to the internet. In recent years, this concept has become very relevant for the insurance industry, where through the implementation of digital transformation, more personalized services can be offered.
Here we tell the case of two types of insurance that have undergone a radical change with the incorporation of new technologies:
1) Telematics: digital transformation in auto insurance
Nobody likes to overpay for a service. That is why more and more companies are implementing telematics devices in vehicle insurance. These devices generate and transmit information on speed, routes traveled, and geolocation of the car in real-time. In this way, they offer the insured the possibility of adjusting the cost of the policy taking into account variables of use and driving habits. This translates into a reduction in the price of their insurance for those who do not use the car or are “responsible drivers”.
77% of policyholders would accept
sharing their personal information in exchange for
certain benefits, such as reduced insurance costs.
Source: Genesys (2017)
This advance allows insurers to provide a quote based on the customer’s actual behavior, instead of based on presumed behavior as it was until now.
2) Geolocation: The digital transformation in agriculture insurance
Other insurance products that have benefited from new technologies are agricultural insurance. Years ago, this type of coverage was defined based on historical statistical data and by zones. However, with the advent of climate change, these data are no longer entirely reliable and with the emergence of “InsurTech”, the risk calculation can be tailored to the client’s needs.
In this case, for example, by simply cross-referencing information with the National Meteorological Service, the company can know in real-time whether an insured field is being affected by rain or hail.
GPS technology provides precise information on the location of the insured property. This, combined with historical data, allows a more personalized assessment of the risk and thus offers the insured a more appropriate coverage.
59 % of clients
would share their information to
speed up policy collection
Source: Genesys (2017)
Now, in this digitization process Big Data plays a major role. Since each of the devices and interactions generates information constantly and for it to be useful it is necessary for the data to be ordered and easily locatable.
The key is to have a solution designed for the insurance industry and, above all, one that is tailored to the needs of the company. It should allow us to manage data centrally, automate the issuance of documentation and, most importantly, offer bidirectional communication to the client. No matter which channel is used to communicate, our policyholder’s experience must always be the same: an agile and efficient response.
5 reasons to start the digital transformation of your insurance company
Now, what are the benefits your insurance company will gain by undertaking digital transformation?
We know that nowadays many companies face digital transformation as a huge challenge. That is why Coldview offers a wide range of solutions adaptable to the needs of each organization.