Reimagining the Future Of Insuretech In 2021
There is a shift in the global insurance market where companies with legacy infrastructure are adapting to a more digital-first business model approach and are in the process of application modernization
With the advent of digital transformation in many sectors, the insurance sector turned out to be a late bloomer to adapt to the changing tides. The first step was introducing and adapting to the digitization of processes. For example, adopting an automation technology that helps in detecting fraud claims, without the need for human intervention.
The Global Insurtech Market revenue is valued at $5.48 billion in 2019 and is expected to reach $10.14 billion by 2025. The industry now appears to be at a key transformation point with many experts viewing the digitization of insurance as the next big opportunity after fintech. There is a shift in the global insurance market where companies with legacy infrastructure are adapting to a more digital-first business model approach and are in the process of application modernization.
While the main challenge of many insurance carriers seems to be addressing an increasingly digital-savvy customer, many carriers also are under pressure of delivering to these customers while maintaining expensive legacy systems and launching new products. The pandemic also played a big role in nudging many insurers to fasten their digital transformation efforts and approach insuretech companies to enable reliable end-to-end operations management, increasing virtual interactions in sales and claims, as well as reduce frauds and risks.
Here are a few trends that will shape the future of insure tech in 2021:
Reimagining customer experience journeys
The ongoing pandemic has forced insurance carriers to relook at their business and future-proof it against the unexpected systemic disruptions that the market demands. Reimagining customer experience journeys will be the key for life and annuity insurers to differentiate themselves and grow sustainably. Adopting an end-to-end digitalized approach across the value chain will enable a purpose-built approach towards creating re-imagined customer experiences.
Data analytics and AI
Data is the new gold and methods of sourcing and interpreting data leads to expanding boundaries and garner a competitive advantage to managing risks and identifying frauds. Future-proof technologies that leverage data analytics and AI are continuously improved to drive greater efficiencies, lower costs and higher levels of customer satisfaction.
Complex tasks and lengthy processes should be automated with digitalization and adoption of emerging technology. The role of a traditional insurance agent should transform to include AI-assisted technologies such as chatbots and touchpoints along the value chain driving greater efficiencies to process like prospecting new clients or closing sales. With newer and nimbler companies coming to the fore in the market, customer journeys become a crucial part of standing out against the competition. Insurance carriers must have a well-built data pool or data lake to take advantage of the emerging technologies and leverage their data rich resources.
To provide a valuable product to the customer, insurance carriers must rethink their strategies to provide agile and innovative solutions and break away from the traditional models. With the rise of digital insurance Carriers need to get serious about adoption of innovative solutions to address their customer's needs to future-proof their businesses. Innovation must be a core part of every processes and not just how they invest in technology.
Insurers should look at transforming their internal systems and the way they interact with their customers with the help of modernization and automation. A startling number of organizations depend on decade old technology and systems that are usually left unattended and drive up the cost of maintenance and development. Achieving the optimum benefits of digitally transforming the systems require complete access to real-time data and agile feature to develop the systems as per need in the future. A cost-benefit analysis is critical for delivering a modernized IT infrastructure that is purpose-built to reap its benefits subsequently.
The increased digitization in the country should serve in increasing the penetration in the yet underserved market. With the increase in foreign investments to the tune of 74 per cent in the recent budget, the industry can witness increased investments which can indicate well for the long-term development of the market in 2021. Deploying new-age tools will help in gauging the requirements and addressing it with equal speed and agility. The year can be looking at the increased penetration leading to new opportunities and better ways to improve customer satisfaction levels.