Just imagine for a second how people used to interact with banks in 10 – 20 years back. Bank customers used to go to banking halls and stand in queues to either deposit or withdraw money.
Five years ago, customers began the process of actually interacting with banks online through a web portal, where they could log into their accounts and move money electronically.
Then if you think about today, customers are no longer using that web page anymore, people are using mobile applications on their phones to move money around.
Technological innovations over the past several years have significantly changed consumer expectations, transforming the way business is conducted.
Businesses are now using technology as a means of instant fulfilment of orders for goods and services.
That is the same wave that is transforming the Insurance industry today.
What is a digital insurance?
Digital transformation is the integration of digital technology into all areas of a business, resulting in core changes in how a business operates and the value they deliver to their customers.
The Insurance industry has seen a growing trend in Insurer technology, interacting with policyholders through digital channels, with the main aim of creating a positive, efficient, seamless customer experience.
These include things like smartphone applications, consumer wearables, automated processing, online claims processing tools, and policy handling.
Another definition of digital Insurance is any company using a technology-first business model to sell and manage insurance policies.
Some hundred years back, many insurance companies have built up assets around the brand, distribution methodology, IT infrastructure, and corporate culture. But now they are revealing themselves to be liabilities.
All of these have served them very well. However, in this era and age of technological advancement, we are going to experience a significant change of guards. The wave of technology has changed everything.
The Insurance companies of tomorrow are going to be natively digital; they are going to be staffed by BOTS and not brokers, Artificial Intelligence, and not by actuaries.
Today we find ourselves in a digital revolution world where technology and information are changing our world and our industries as well.
To compete in today’s evolving insurance industry, insurers know they have to provide the speed, agility, accessibility, and ease of use; Only digital insurance can deliver these expectations to policyholders.
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Benefits of digital insurance to policyholders.
Below is how an ordinary household consumer policyholder can benefit from digital insurance.
New personalised products for key market opportunities in a fraction of the time.
The arrival and rapid diffusion of digital technology in the last decade of the 20th century have changed the way customers think and process information. More customers have become digital natives and well informed.
Customers are searching for information on their own, and buy from people they trust or who are trusted by their friends and communities.
Customers’ expectations are changing so insurance companies need to change too
To be competitive and serve their customers better, digital insurance companies are handling them as a unique individual, and know their personal preferences and purchase history.
The use of mobile applications by insurance companies, pulls disparate policies into one platform for management and monitoring, creating on-demand insurance for micro-events needs.
On-demand insurance allows households consumers policyholders to buy an insurance policy on their smartphone whenever and wherever they want, normally when the asset requiring coverage is in use and at risk.
For example, a company called Bind Benefits offers an on-demand model, allowing households consumers to design their health insurance coverage based on their current needs or life events.
Super intelligent agents available 24/7 in your pocket at any time.
Digital transformation is forcing insurance companies to change their business models and adapt to the new market reality.
We are living in a world of connected lifestyle, information about people, places, and things have been combined and stored in data clouds and accessible everywhere anytime.
Today, customers expect relevant content concerning what they’re doing anytime, anywhere, and in the format and on the device of their choice.
Digital Insurance companies are using Mobile devices, apps, machine learning, automation, and other technological advancements to allow customers to get what they want almost exactly at the moment they need it.
They have developed a model that rates individual policyholders to predict how likely they are to buy an insurance product, the range of products they might purchase, and their likely duration as a customer.
These include using deep learning trained artificial intelligence (AI) to handle the tasks of brokers and find the right mix of policies to complete an individual’s coverage.
Increase cost savings.
As digital technologies continue to revamp how businesses grow and operate, the related risks and opportunities are pushing insurance companies to increase cost-reduction Approach.
Going digital has been shown to greatly increase cost savings, both for insurers and insureds. With more accurate underwriting driven by big data, AI, and predictive analytics, insurers and insureds both save big.
These technologies help insurance providers collect and analyze customers’ data so they can target the right customers at the right price, encourage them to behave in a less risky way, and cut the cost of claims.
The digital insurance companies are Incorporating technologies like Machine learning which automates traditionally dawdling insurance operations, like claims processing by utilising preprogrammed data, algorithms, and data shared by policyholders.
This enables them to automatically serve policyholders in their greatest time in the insurance industry, data is important; it helps drive underwriting, pricing, policies, and more.
Digital insurance technology has empowered customers to get what they want, whenever they want, and how they want it. The model was developed with speed and scalability in mind.
Digital insurance is exploring avenues that large insurance firms have less incentive to exploit, such as offering ultra-customised policies, social insurance, and using new streams of data from Internet-enabled devices to dynamically price premiums according to observed behaviours.
Today’s consumers expect everything to be instantaneous, when and where they need it. The rise of digital insurance has tried to bridge this gap.
Fraud Detection predictive analytics is being used to spot trends in customer behaviours that might be a red flag for fraud. All of this data is giving insurers greater insights into customer behaviours and risk than ever before.