Digitization Can Make Insurance Relevant For the Click-Happy Generation
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Digital technology is the future of every industry. Insurance companies that use traditional methods to carry out their operations face several bottlenecks in their operations that may result in inefficiencies and lower customer satisfaction. Consequently, many insurance companies are seeking and actively developing digital technologies to streamline their processes, assess risk better, reduce cost, and increase customer satisfaction. Further, insurance advisors are also adopting digital tools to better interact with their customers and make the process of buying insurance seamless. Some of the more common digital tools that insurance companies can leverage are discussed below.
Innovate to stay relevant
The insurance juggernaut involves multiple processes, some of which can be greatly enhanced by optimally leveraging the right technology. Automation of claims processing, personalized insurance plans, chatbots, and data analytics are four key aspects that can change the face of the insurance sector and elevate the customer experience.
Chatbots for insurance companies
Every year a significant amount of resources are invested in maintaining traditional call centres to help customers with their information details, decision-making process, providing reports, etc. Companies can automate a part of the customer service through chatbots. Companies can enable the chatbot facility on various platforms such as website, app, and mobile site. Customers can have conversations with the chatbot and get information regarding their claims such as their claim status, payout amount, and check the status of their payout. The chatbot can also solve simple customer queries, freeing up the time for customer care executives to handle important calls. With machine learning processes and human expertise, chatbots can handle many customer care queries. This will help to reduce the load on call centres, cut costs in the customer support vertical, and result in faster resolution time for customer queries.
Data analytics for customization
The increasing use of digital technologies has ensured that our ecosystem is flooded with all sorts of data. Some of this data is valuable in the form it is generated while most of it needs to be analyzed further to derive actionable insights. Data analytics is slowly becoming an integral part of insurance companies. By analyzing customer data, insurers can better assess the risk associated with an individual and accordingly price the insurance policy to reflect this risk. Further, insurance companies can embed themselves in the journeys of their customer and reach out to them with the right products and at the right time. For example, educate a client about the relevant insurance policy at the time of an individual’s marriage, childbirth, etc.
Automation of claim processing
Claim processing is one of the most important aspects of any insurer and is really the litmus test for a good insurance company. A faster and more seamless claims process can deliver the desired customer satisfaction and foster trust and loyalty. Machine learning (ML) and artificial intelligence (AI) can improve the processing time of claims and reduce the instances of fraudulent claims, thereby benefiting both the insurer and the customer. Machine learning can swiftly analyze past data basis claim descriptions or visual evidence to authenticate the claim and identify similar claims made in the past. This will enable the insurer to make faster claim decisions and lower the probability of human error. For example, in case of a car accident, the insured individual can upload snaps of the damaged car. AI tools can then be leveraged to analyze the photos, assess the damage, and authenticate the claim.
Accurate premium pricing
Traditionally, the risk assessment of an applicant relied on collecting a few data points on an individual assigning a risk quotient based on pre-determined risk buckets. Insurers largely focused on average collective risk rather than specific risk. This was primarily due to the fact that it was challenging to glean nuanced information about an individual. However, technology is now shifting this paradigm. It is allowing insurers, with consented access, to get up-close and personal with their customers. In the current scenario, wearable devices and social media activity of customers can help insurers understand their client customers better and more accurately assess customer-specific risk. At the same time, it is important that insurers maintain data privacy and access customer data only after receiving customer consent. Consequently, customers can receive cheaper and highly personalized solutions as per their requirements.
It is inevitable that digital initiatives powered by technology will drive the insurance sector. Companies that can adopt these initiatives early and adapt to the changing landscape will be better positioned to serve their customers and foster enduring partnerships with all stakeholders in the insurance ecosystem.