The Most Disruptive Force in the Insurance Industry Right Now — Digital

According to PwC, the insurance industry is an industry under stress. The top 10 largest risks facing the industry in New Zealand are:

1 Change management

2 Technology

3 Competition

4 Cyber risk

5 Reputation

6 Regulation

7 Human talent

8 Investment performance

9 Social change

10 Cost reduction

“The companies that develop a meaningful competitive advantage will design and implement digital platforms that can handle disruption and positively change cost structures.” (PwC)

PwC’s 21st CEO Survey uncovered:

• The three biggest concerns are over-regulation (95%), cyber threats (93%) and the speed of technological change (85%)
• 80% are concerned about a shortage of digital skills (higher than any other industry)
• 49% are planning a strategic alliance or joint venture to ensure growth over the next year
• More insurance CEOs (78%) see changes in consumer behaviour as a threat to growth than those in almost any other industry (only entertainment and media is higher at 80%).
• One-third cited technology (including market entrants often behind technological change) and customer expectations for 24-hour service as the biggest influences on the insurance business

It would seem that digital is the most disruptive force in the insurance industry right now, but by adopting their own digital technologies insurance companies can:

• Be flexible with current offerings
• Respond to disruption
• Be consumer-centric and deliver better customer experiences
• Rethink policy, billing and claims systems
• Improve operational efficiency
• Improve cost structures

The importance of being customer-centric

In relation to the customer experience, the modern insurance company should consider how they can best provide a digital experience throughout each stage of the entire customer journey. That requires knowing the customer, their problems, the journey itself, and defining a strategy around how to best meet those needs instantly, while collecting and analysing data.

Developing a detailed understanding of the customer journey is crucial in improving customer value. Knowing your customers as individuals, with unique personalities, emotions and preferences, can help insurance companies identify opportunities and develop their offerings to uphold a customer-centric priority in a competitive, disruptive landscape.

Humans & machines, together

Over the past year, technologies such as the cloud and artificial intelligence have matured beyond just being innovative and having huge potential. Today, these new technologies are tried, tested and proven resources.

“AI could contribute up to US$15.7 trillion to the global economy in 2030, more than the current output of China and India combined. Of this, $6.6 trillion is likely to come from increased productivity and $9.1 trillion is likely to come from consumptionside effects.” (PwC, Sizing the Prize Report)

Artificial intelligence and robotics offer new ways to reach larger volumes for the same or fewer headcount. The efficiency and personalisation of an AI customer experience can filter from brand awareness, advice, through to the claim process without losing the rapport of human touch. Emotionally intelligent conversation engines can mimic the empathy of a human; while human handover functions serve as a safety net for complex cases or consumers who still prefer the real deal. Even with a human handover, the customer journey is streamlined with leads being profiled, qualified and seamlessly handed over to staff with detailed tickets.

Sophisticated conversational technology allows humans and machines to operate in collaboration to harness the rapport of humans and efficiency of machine — delivering more personalised, streamlined customer journeys.

Additionally, appropriate enterprise grade, conversational technology can deliver sophisticated analytics detailing the contents of every conversation, user profiling, and metrics like return on investment, arming insurance companies with more information about their customers than they’ve ever had before. This is a powerful tool when optimising sales, marketing and investment strategies.

Solution — Partnerships

With the help of InsurTech companies and white labelled products, insurance companies can adopt such technologies without the huge cost and internal upheaval of in-house development. Rather, by partnering to deliver these technological developments, insurance companies can give themselves the ability to better understand, acquire, serve and retain customers in new and cost effective ways — adding value across customer engagement and cost structures. Partnerships like this can help insurance companies respond to disruption from changing consumer demands and industry incomers.

Conclusion

Insurance companies have typically been slower than other industries to embrace new technology, but this is changing. Insurers that aren’t already prioritising a digital strategy risk falling behind.

In determining readiness for growth in the face of digital disruption, PwC suggests that insurance companies ask themselves the following questions. Is your organisation:

• Leveraging new platforms to change the customer engagement model?
• Leveraging analytics-based insights with a clear vision and plan to translate that into value based capabilities?
• Promoting ongoing innovation — both internally and to customers?

If you’d like to discuss digital options for your company’s customer journey, feel free to book a meeting with one of our team by clicking here.

Originally published at www.jrny.ai.