The rapid technological development, overwhelming digitalization, and the impact of the global pandemic have altered customer behavior and expectations about purchasing goods and services. Modern consumers are used to researching products, comparing options, and buying everything they need online. The same applies to the insurance industry, as clients expect companies to make information and services available digitally.
Insurers recognize the growing demand for digital services. Thus, according to KPMG’s CEO outlook, about 85% have reinforced their pursuit of digitalization, while 80% enhanced their efforts to provide a seamless user experience. The two concepts are intrinsically intertwined since the right combination of digital channels can elevate client satisfaction.
Meanwhile, numerous insurtech companies are joining the game, delivering the degree of digital experience that modern customers aspire for. Therefore, incumbent insurers face challenges in adapting their infrastructure to new customer demands. How can legacy agencies stay ahead of insurtechs in the era of the digital economy? First of all, they shouldn’t attempt to beat insurtechs at their own game. They should start with researching customer expectations, prioritize relationship building, and nurture digital environments.
The article studies how traditional insurance companies can overcome the challenges posed by emerging insurtechs and embrace digital technology for their maximum advantage.
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The challenges facing traditional insurers spread from coronavirus-related payouts to cyber security threats and fierce competition from the side of thriving insurtechs. However, their future prosperity depends on whether or not they manage to promptly adapt their operating models, products, and working processes to a new reality in the smoothest and most cost-efficient manner.
New technologies impact the insurance business. Thus, insurers must implement software correctly to unleash the full potential of digital transformation. Thankfully, abundant software solutions for insurance companies aim to streamline the transition from outdated legacy systems to advanced ones with minimal operational expenses.
Digital transformation supported with breakthrough software tools can spur the development of specific insurance organizations and positively affect the whole industry. The transformation implies leveraging digital technologies to revamp existing operations, work cultures, and client experiences. Here are the primary advantages of digital transformation in the insurance sector:
Read about how mobile apps can improve customer experience in insurance.
What constitutes modern digital insurance or digital insurance 2.0?
The customer-centric approach denotes the alignment of the organization’s offerings with its consumers’ current and future demands, aiming to maximize the financial value of these consumers. Such a strategy stems from a deep understanding of customers, their preferences, their likelihood to retain loyalty to the brand, and the opportunities for the future evolution of relationships.
Personalization is no longer a nice-to-have feature. It is a must-have for insurance companies of today. Personalization and customization of products and services refer to delivering ultra-targeted offers, messages, and prices to the right people at the right time. Such operations heavily rely on vast volumes of data, which are possible to collect and analyze thanks to advanced digital insurance tools. AI solutions are used to deliver personalized packages with precise targeting.
Operational efficiency is a general approach that helps address various challenges the insurance industry encounters today: growing expenses, altering consumer expectations, increasing competition, and more. To optimize their efficiency, insurers adopt programs intended to enhance flexibility and agility and simplify operations, eventually elevating user experience and saving costs.
The corresponding methods primarily include:
To adopt a partnership-oriented approach and effectively leverage digital channels, the insurance ecosystem should open up for external players. Thanks to the availability of standardized insurance APIs, companies can get equipped with adequate tools that enable superior interoperability with external ecosystems, including banking, healthcare, IoT, and more.
The open insurance paradigm allows players to deliver their new digital services with greater flexibility, scalability, and speed to meet the ever-changing customer demands.
An omnichannel approach entails the sales and marketing processes conducted through multiple channels. The latter includes an insurer’s website, user’s smartphone, physical stores, social applications, messengers, and more. The goal of an omnichannel model is to consolidate communication across channels to provide a seamless transition from one channel to another and create an overall smooth and coherent user journey.
Customers’ changing needs have shaped digital transformation that includes a more personalized service portfolio and product assortment. AI is used to offer clients personalized packages targeted precisely at their needs. Add-ons and tailored insurance solutions mean that the old one-size-fits-all model is now obsolete.
So, what are the fundamental steps for insurers to survive and prosper in the modern digital environment?
The shifting consumer expectations foster the emergence of new and diverse channel options throughout the entire value chain. Such touchpoints as marketplaces, comparison sites, insurance embedded in other businesses, and direct distribution are gaining traction.
Consumers worldwide are moving toward digital channels. About 50% of U.S. insurance users are already purchasing online, which is predicted to escalate. Therefore, industry players should recognize the importance of their digital presence and shape the corresponding channel distribution strategies.
To properly implement their innovation and growth plans in the age of Digital Insurance 2.0, insurance companies should focus on the following aspects:
By enriching your client’s journey with multiple digital channels, you will win in various aspects.
The entire process of purchasing insurance online is significantly easier for users. As a rule, customers can get quotes and choose their insurance plans online. Therefore, they don’t need to attend a branch, fill out paper forms, or even connect with an insurer by phone.
Automation tools like chatbots can instantly address customer queries and answer frequently asked questions. By handling requests without human interference, digital solutions save resources and reduce the associated expenses.
Modern clients require instant resolution of their requests. Thanks to online transactions, users become empowered to conduct various insurance-related processes promptly and conveniently. They can use the insurance services from any place and at any time. Besides, by digitizing the processes of buying policies and submitting claims, agencies simplify the customer journey.
A universal approach in insurance doesn’t work anymore. Instead, companies craft tailored products and offerings via digital insurance procedures. Digitalization allows for creating user-based, on-demand, and all-in-one lifestyle offers that conform to customer needs. The products become more flexible, including micro insurance and peer-to-peer options, which leads to a more relevant product portfolio.
The advent of digital marketing enables considerable savings, especially on advertising and infrastructure. Without an agent, a direct interaction between an insurer and a client minimizes the time and money spent.
By elevating the overall customer experience, from the buying to the post-selling stage, digital marketing allows insurers to construct trusted client relationships, drive loyalty, and minimize churn. Modern technology solutions aid in facilitating a customer journey and not only meeting but also anticipating user demands. Ultimately, happy customers will likely become loyal customers and spread the word about your brand.
According to our experience, three digital channels shape the backbone of a stellar strategy. Although there is no universal solution for all, you may consider prioritizing these tools in your digital mix. The channels include mobile applications, web portals, and AI-powered chatbots.
Mobile applications grant the convenience of instant access to all the services whenever a user might need them. The benefits of implementing effective, user-friendly insurance mobile apps throughout the entire client value chain are striking.
A custom web portal is a mandatory tool for insurance companies. It should empower users to get online quotes for various packages and services or obtain the product of their choice.
Remote self-service. No more are your customers limited by your team’s working hours or office location. A self-service portal delivers client support round the clock.
Unobstructed access to product information. Product descriptions, FAQ sections, customer support, and other relevant data are continually available for users. This functionality allows clients to obtain instant answers to their questions without increasing the strain on your customer support department.
A prompt claim approval. A transparent claim management process streamlines operations and delights customers. You can automatically inform clients about each phase of the approval process with the help of real-time notifications, eliminating their uncertainty and anticipating concerns.
Reduced customer acquisition cost. A convenient and engaging web portal encourages users to continue their interaction. Excellent client experience facilitates the customer journey throughout the sales pipeline, thereby reducing acquisition costs.
Optimized product channel distribution. A web portal is a perfect platform for implementing various channel distribution strategies. It allows insurers to explore a whole range of digital marketing tools, including search engine optimization, content marketing, pay-per-click ads, and social media ads.
Enhanced customer retention. Web portals give fruitful grounds for establishing a neat client management system that automates and personalizes communication. By providing automated reminders of agreements’ renewal, tailored offers, and other valuable information, such a system drives satisfaction, loyalty, and retention.
Customer data accumulation. Self-service portals are instrumental in collecting data and analyzing user actions. Insurers can work out more relevant and highly customized offerings based on this information.
Explore the related case study: Web portal for claims management.
AI chatbots are quickly becoming usual for insurance companies as they are indispensable in quickly handling simple customer queries. They have also proven their efficiency in providing financial advice and managing claims. Thus, up to 44% of users are satisfied with using chatbots when making their claims and applying for insurance.
AI chatbots utilize NLP and machine learning algorithms to better understand the user’s sentiment and respond dynamically. They can address various customer requests, making the service swift and easy like never before. The tool can also help customers navigate through different insurance products.
Explore the related case study: Chatbot for insurance.
Traditional agencies must craft a thoughtful and comprehensive digital marketing plan that radically differs from conventional strategies that worked fine several years ago. Insurers need a holistic view of an entire customer journey that is attainable by orchestrated and coordinated campaigns throughout digital channels.
To compose the right marketing mix, start with analyzing the market, competitors, and target audience, as well as your company’s strengths, weaknesses, opportunities, and threats.
Ultimately, you will be able to answer the following questions:
The answers to these questions will help you identify the areas where digital tools can bring maximum fruit. To leverage each tool to its maximum efficiency, consider the following recommendations:
DICEUS is a software development company that crafts custom technology solutions to satisfy businesses’ needs. We work worldwide with a team of more than 250 full-time tech professionals. Our experts have successfully completed over 120 projects, and this number continues to increase.
Insurance businesses cannot survive without digital tools, and we at DICEUS put all our efforts into delivering all the digital services you may need. We can help you select the proper digital solutions and implement them for you seamlessly.
Read more about DICEUS.
DICEUS can handle the project comprehensively, starting from business analysis and customer journey mapping and finishing with maintenance and performance optimization. Our tailored solution will allow you to minimize operational costs, drive loyalty, and improve customer acquisition.
Our mobile application development services embrace various domains. We create solutions for smartphones, tablets, and other devices. The engineering process encompasses all the necessary phases:
Depending on your goals, we can craft a unique mobile application that is compatible even with exotic operating systems, such as Tizen and Chrome OS. We also offer cross-platform apps that function on different devices.
Our mobile application development services include:
The complete list of your opportunities does not end here. Share your idea or an issue you need to address, and we will elaborate on a bulletproof solution.
DICEUS approaches customized web app development comprehensively, starting from the discovery stage and managing the full-cycle SDLC. An advanced web portal will streamline your processes, reduce paperwork, and grant unique functionalities to your team and customers.
We provide an exhaustive range of development services, including research, design wireframing and prototyping, architecture planning, coding, optimization, support, DevOps, and more.
Be sure that we will find the most advanced tech stack to deliver you a stellar product.
Specifically, we offer:
We consider your business goals and logic, product specifics, and the audience’s aspirations to work out the most relevant conversational flows. Our software will help your customers minimize their efforts to buy your products or submit a claim. We also offer integration of messengers, such as WhatsApp, Telegram, and Viber, to your core systems to expedite customer interaction and further enrich their journey.
What we do:
Here is an example of chatbot features for car insurance:
We possess ultimate resources, expertise, experience, technical stack, and passion for bringing whatever project to sensational results. According to your goals, we can adjust a cooperation model, the required types of services, the end product features, and any other parameter you may need. A perfectly functioning solution and a delighted customer are our hallmarks.
The fundamental advantages you can expect from our cooperation include the following:
Therefore, we master all tangible and intangible means to help your business attain and surpass its goals. Let our team remove whatever concerns you may have and safely rely on professionals to succeed in your digital transformation.
Win an edge over the competition thanks to skyrocketing customer experience and address the challenges facing your organization in the modern environment. Besides, with digital technology, you will open the horizon of new opportunities for your business growth.
Contact us to start an exciting digital journey right away!