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By Anton Keet, Head of Risk Services at 1Life
Digital disruption continues to change the insurance industry. Of course, the COVID-19 pandemic has also accelerated the process and bought about a paradigm shift - a world that is now powered by technology. As a result, the industry is now forced to revise its business models – to remain relevant with customers and to build resilience in the face of this ‘new world’.
The reality is that a ‘one-size-fits-all’ approach is no longer applicable. Customers are becoming more demanding and now expect far more personalised and tailored services (and products). Not only this, but they also want efficient experiences, quick claims process and more versatility – all of which must be available anywhere and at any time – and in a way that makes sense for their individual lifestyles as well as budgets.
No easy feat. As a result, meeting changing customer demands is not only at the top of the agenda right now, but will dominate business strategies into 2021.
While the new year will likely see the insurance industry witnessing stronger growth, as new technologies transform the traditional operations within the industry, how they manage this growth will be key to their own ability to remain relevant.
As a result, I believe the industry will have to focus on five key aspects if it wants to keep pace with demand and change requirements. These include:
1. The use of disruptive technologies
The use of Robot Process Automation. This software technology works by relying on software robots that use Artificial Intelligence to perform so called ’everyday’ tasks. Tasks ranging from controlling desktop-based applications to gathering data from numerous data bases – and then feeding it into applications to analyse. Robotic and cognitive automation across the insurance value chain will be significant, as when applied correctly, will offer less documentation, quicker turn around times, more productive claims agents and less processing time. All of which also eliminates errors and delivers a processed claim, to a client, within minutes.
2. Embracing predictive analysis of data
Using predictive analytics not only allows for data review but, more importantly, gives the ability to form more predictive customer behaviour patterns. Additionally, it aids in calculating risk factors associated with this sector, like fraudulent claims or the risk of insurance cancellations by existing customers – which are a hinderance for any insurance business.
3. Using Artificial Intelligence to lead the way in the ‘new world’
We are already seeing long-term insurers placing significant investment into data analytics and modelling techniques to enable quicker, better, and more convenient insurance. However, when Artificial Intelligence (AI) is embraced it will enable a far more dynamic underwriting process. Insurers will now be able to design more simplified, and convenient solutions, to meet client expectations. Given the impact of digital transformation, we will see the industry embracing automated underwriting systems far quicker in 2021.
4. Diverse communication channels
A key change in this space is the intrinsic focus on simplified communication channels to ensure that customer interactions are quicker and more convenient – and this means more focus on:
- Chatbots
These interact with customers and help them solve commonly faced issues, while offering a helping hand in completing processes, such as policy application filing and claims.
- Social media platforms
The evolution of social media is here to stay and to make things easier for consumers. So, we are also likely to see the industry creating more platforms where clients can receive a quote, or process a claim on social platforms, like WhatsApp.
- Digital intermediary solutions
The entire industry has realised that consumers want quick and easy solutions and they also want their insurance provider to deliver direct channels to interact. This is not going to change in 2021 and in fact is fast becoming the primary choice for consumers - where everything is just a click away.
5. The importance of human touch
Even with advancements in digital technology and the ease it brings, people still want to interact with people. And we know that there are still certain functions within the insurance sector that require diligent and precise evaluation, like the claims process, where the human touch merges with technology to form a more cohesive and less error-based approach. As we move forward, human and technology collaboration will play a fundamental role in the survival of the industry – and these each require support and guidance - for success.
Although 2021 comes with uncertainty, the growing use of technology has offered some form of comfort. I believe that the explosion of technology innovation we are seeing will play a fundamental role in enabling the industry to place more focus on the client – encouraging a more customer centric and resilient insurance business model.