Data, tech, and AI: Changing the future of insurance underwriting
Data analytics and AI are reshaping insurance underwriting by streamlining processes, personalizing products, and improving CX.
Today, many insurance consumers prefer getting services via digital channels, including websites, mobile applications, chatbots, and online portals. Digital transformation in insurance has made it made it easier for customers to interact with a company because they don’t have to go to a physical office to buy a policy or submit a claim.
For insurers, the benefits of digital evolution are clear: more clients buying policies online instead of calling a call center, reduced costs of operations, automated workflows, and satisfied customers.
Obstacles to digital transformation in insurance
However, despite all the advantages, not all insurance organizations are ready to embrace digital transformation. Without a doubt, it can present some daunting challenges:
- A time-consuming process
- Considerable investments
- Lack of expertise
- Personnel resistant to change
To reduce the risks, insurance executives should be aware of the key issues to consider when building a digital strategy.
Evaluate customer pain points
Digital transformation in insurance starts with getting a 360-degree view of the business and the experience it provides customers.
Learn how the user journey is aligned with business workflows. Start by defining project objectives and identify issues and difficulties staff and clients face while interacting with the company. For instance, customers may feel stressed waiting a long time for answers to their questions when calling an agent or feel uncomfortable filling out dozens of papers to buy an insurance policy.
Conduct interviews to determine what bothers customers. Usually, these are done by UX/CX researchers who speak with your clients and identify their problems at each touchpoint.
Setting goals for digital transformation
With a list of these challenges, you can consider the most effective ways of overcoming them. Set appropriate project goals by understanding how your business workflows relate to user experiences.
Among the most frequent objectives are:
- Boosting customer loyalty and satisfaction
- Building a new digital channel with upsell and cross-sell features
- Increasing revenue
Engage project stakeholders
Involve all knowledge owners and stakeholders and explain the advantages of digital transformation in insurance. For instance, customer satisfaction can be increased by reducing the time it takes to file a claim from 40 minutes to 20 minutes if the client uses a mobile app.
Establishing a cross-functional team is essential to enlisting executive involvement for the digital transformation initiative. It involves individuals from diverse departments collaborating on a shared objective or project.
In the context of an insurance company, this might entail bringing together teams such as sales, marketing, and customer support. Their collective effort allows them to exchange insights and strategies to improve the efficiency of the sales process, benefiting both customers and insurers.
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Assess IT infrastructure
Conducting a tech audit for an insurance organization is challenging if there’s insufficient in-house IT expertise, skills, or resources. The audit findings help you identify the key hurdles and issues.
A technology provider or software development vendor can help an insurer to understand why their customers aren’t satisfied with a mobile application they offer to customers.
A thorough audit or a discovery phase will allow for finding problems and recommending solutions, including prioritization of project tasks, how many developers are needed, what tech stack to use, and an estimate of how long the project will take.
Execute and continuously track progress
In most cases, the implementation of a digital transformation plan follows a phased approach. Nowadays, software vendors and digital innovation accelerators commonly adopt the Agile methodology.
This approach facilitates iterative development, where Agile teams operate within brief iterations or sprints, typically spanning one to four weeks. Each iteration encompasses a complete cycle of activities, including planning, design, coding, testing, and delivering a functional software component.
Essential elements of this stage involve diligent progress tracking using key performance indicators (KPIs) and conducting regular reviews to improvements.
With a well thought-out plan and careful execution, insurers can overcome challenges in their digital transformation journey and remain competitive for years to come.
