How to gain a competitive advantage in the insurance sector through digital channels

The across-the-board advent of Industry 4.0 has made digitalization a vital necessity for numerous industries. Enterprises in various domains – from retail to banking – robustly introduce state-of-the-art solutions in their pipeline routine and customer interaction.

The insurance sector is moving in the wake of this global technological trend, extending a range of services to consumers via electronic media. So, let’s look at how innovative know-how can revolutionize this field and make its services more accessible and affordable for the digitally-savvy clientele of the early third millennium.

Check what we offer for insurers:

Digital channels — Mobile apps, web apps, and chatbots

Digital vs. online insurance capabilities: A difference that matters

People dealing with gadget-powered insurance services have a misconception. Many use the word “digital” to describe any online activity in this realm. Yet, “digital” and “online” aren’t identical. It is true that everything digital is online, but not the other way around. So, what’s the difference?

Aiming to oblige their customers, modern insurance companies try to keep their visits to brick-and-mortar offices to a minimum. For instance, after a car accident, people can take a photo of their damaged vehicle, fill out documents in the e-format, and send them all via the internet to the company’s site. The latter checks all information and makes a payment. Or, people can buy a policy on the website too. All these moves are online, but they aren’t digital.

What is meant by digital insurance capabilities? This is when human interference in any insurance-related procedure is reduced to increase the speed and quality of decision-making and avoid possible errors and biases. For example, the mentioned car accident case will get a digital treatment if the photo is reviewed by software that communicates with the client after that and addresses the payment issue entirely by itself.

Implementing digital techniques in the insurance realm is more complicated than in other finance-related spheres (such as banking) because human interference can’t be excluded here, especially when it comes to complex corporate products with many nuances to consider. Nevertheless, it is a must when underwriting, where employees often decide how much risk insuring something involves. However, specialized scoring systems and financial models can be a good crutch.

While harnessing digital capabilities, insurance companies must steer by people’s expectations when they apply for their services.

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Digital channels: Benefits for customers

The client-first approach is the bedrock of any contemporary business strategy and works well for the insurance industry. What do people want when they address insurers? It is better to start with what they don’t. And in our fast-paced world, it is definitely to waste a lot of time choosing conditions and pricing options. So, while dealing with an insurance company, people expect:

As soon as solutions offered by an insurer guarantee all (or most) of these, people will get a satisfactory customer experience, making them prefer this same company over its competitors in the industry. First, however, organizations in the field should consider the peculiarities of the insurance events and objects in attempting to meet their clients halfway.   

Learn what experts think about the future of insurance technologies: 

Podcast with a founder of BriteCore: Achieving growth with the help of technology 
Interview with a former CEO of Willis Nordics: How technology impacts insurance 

Digital channels: Benefits for insurers 

As a seasoned vendor with multiple developed insurance solutions, DICEUS knows the nitty-gritty of onboarding digital instruments in different use cases.   

Insurance services for enterprises and corporate clients aren’t that easy to digitalize because of the vast number of individual customers and the types of policies that can work there. Since digital means can’t cover all aspects of the insurance processes (especially in corporate insurance), qualified human personnel should step into the breach. Digital channels they employ can be used as additional tools to assist them and streamline some repetitive processes. And the greater the size of the enterprise is, the more inadequate the exclusively digital approach becomes.  

On the other hand, the domain of retail services (like vehicle or travel insurance for physical clients) is likely to witness the total disappearance of classical offices with specialized staff. This sector can enjoy the benefits of digitalizing insurance services, with most programs and sales occurring via digital and online mechanisms. Besides, onboarding professional software to cater to the needs of individual customers can save both them and organizations a pretty penny. Why?  

Related case study:

Claims management system for insurance 

Key benefit: Digitalization allows for reducing the cost of a tariff 

Naturally, developing insurance software is never a chump change issue. Organizations that opt for it must be ready to fork out a considerable sum to have a top-notch insurance solution. However big the worth may seem at first, this investment pays off in the long run. How does it work?  

Delegating most tasks to AI leads to automating pipeline processes and diminishing the personnel involved. And employee-related spendings are the most significant expenditure item in any organization’s budget. So, suppose software replaces a multitude of underwriters, sellers, marketers, and other specialists. In that case, the insurance company will eventually save on their salaries, paid vacations, sick leaves, etc., and administrative expenses. But it is not only about the direct cost reduction. More efficient handling of insurance events and interaction with clients spells a greater influx of customers and bigger profits for insurance companies.  

 

People looking for insurance services also come out on the right side of the digitalization drive. By leveraging various analytical solutions, companies can streamline the calculation of tariffs and optimize their structure. As a result, they become fairer and more individual. Thus, in vehicle insurance, companies establish such plans as “pay as you drive” and “pay how you drive,” where tariffs differ depending on the driver’s behavior, and distance traveled. As a result, people can choose whatever they like according to their preferences, habits, and wallet size.   

This more personalized approach is yet another magnet drawing customers by the dozen. Moreover, it will become a competitive edge for digitally-minded insurers, enabling them to stand out among not-so-tech-savvy rivals in the niche. Yet, despite the apparent assets of adopting the digitalized approach, not all companies are prepared to implement it.  

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Are insurers ready to exploit digital channels to the fullest extent? 

Currently, the digitalization trend is proceeding on a small scale, chiefly because of the structure of the insurance market. Conventionally, companies operating in it rely predominantly on affiliate sales channels. It means that people get insurance while making some purchase (for instance, buying a car or booking a trip). Car dealers or travel agents sell policies, and people buy them as a part of the package deal, so neither affiliate partners of insurance companies nor clients feel any need for digitalization.   

The upgrading of the insurance services level becomes necessary when service providers focus on voluntary and individual insurance, where fast and efficient interaction with a customer conditions business success and the steady growth of the clientele. As this segment of the insurance market expands, companies will increasingly harness digital know-how both in their client-side routine and internal workflow optimization. So, what digital channels proved to bring the most value to insurers?  

If you’d like to learn more about the potential of digital channels for your business, check out our solutions. 

Digitalizing insurance routine: The DICEUS approach 

DICEUS is a software development company that keeps abreast of the current trends in the industry. That is why we offer insurance organizations three tools to increase customer engagement, reduce costs, and accelerate all shop floor procedures they rely on in their workflow.  

• Custom mobile apps. In our smartphone-driven age, ignoring people’s mobile experience is an unforgivable oversight that spells lagging behind your more tech-oriented rivals. Therefore, we offer full-cycle app development services that embrace customer journey mapping, buyer persona identification, and business analysis. The outcome is a high-end application that will keep your clientele in the know of the latest events and foster customer loyalty.  
• Custom web portals. These benefit both customers and staff. By harnessing a web app with unique functionalities, an insurer can cut down on paperwork and streamline the pipeline activities for all stakeholders.  
• Chatbots and messengers. It is impossible to imagine modern customer service without AI-fueled chatbots that tackle all redundant and elementary operations customers of insurance agencies perform (like submitting a claim or purchasing a policy). Our expertise allows us to take into account product and niche specifics, as well as the relevant conversation, and flows, to create a solution with an integrated messenger that will facilitate the workflow immensely.  
   

Key takeaways 

Today, an ever-increasing roster of industries onboards high-tech solutions to enhance their efficiency and augment customer engagement efforts. So far, the insurance field is somewhat slow in adopting them. Still, the most forward-looking actors take innovations in their stride and introduce online and digital channels in their interaction with the clientele. By harnessing a mobile app, web portal, and chatbot, insurance companies can reduce expenditures, optimize tariffs, accelerate service providing, reduce paperwork, and keep communication with customers open 24/7.