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?
The price: 1 out of 3 respondents states that they would change insurers to pay less. For this reason, more and more companies are betting on technologies that allow you to quote in a personalized way.
Recommendations: The experience of family and friends is an influential factor. To this aspect, we can add the incidence of the reviews of each company that can be found on the Internet.
Online information and management: More and more users are comparing options and contracting services online, with those companies that offer 100% online management being the most important.
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?
Reducing administrative times: New technologies simplify management for both the customer and the company. The possibility of automatically quoting and contracting insurance online, communicating with an advisor online, or submitting the documentation for the collection of a policy through an app; to name a few.
Increased revenue: Thanks to the automation of commercial tasks and improved collection processes.
Improve customer experience and satisfaction: The application of technology devolves into clearer and more agile processes, which help the customer understand the processes by making them more transparent. Eliminating the piles of paperwork to sign, where the fine print always made the customer hesitate. Above all, giving you the peace of mind that your insurance company listens to you and responds to you (even if it sounds obvious).
Save operating costs: By implementing artificial intelligence, and automating and digitizing processes, resources are optimized. These can be hours of our team’s work and other resources such as for example, paper to print policies or communications by physical mail.
Facilitate access to information for the entire chain: Both members of the company and customers will have access to the relevant and updated information in a simple way.
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.
Has your company not yet undertaken the digital transformation? Contact us or send us a message and we will tell you how we can take your insurance company into the digital era.