The insurance industry is changing. This once product-driven industry is seeing an increasing need to become consumer-driven. Today’s average insurance customer has dozens of choices in providers. While they still understand that insurance is essential, they also know they have many savings options available. To compete, insurers must create a customer-driven model that’s designed to incorporate their customers’ needs, while also addressing loss prevention and better protection services. To facilitate this, companies are moving towards digitalization.
Consumers expect interaction
A survey from Bain & Company and Research Now shows that carriers are zeroed-in on building better customer loyalty. That’s critical when considering just how easy it is for consumers to move from one provider to the next. Yet, to do this, they must focus on improved customer interactions. Customer engagement must focus on a more integrated and multichannel environment. This includes providing customer-focused product offerings based on what a customer needs. It also means utilizing artificial intelligence to create chatbots to answer consumer questions quickly. Moreso, consumers want a company that understands their risks and offers an insurance policy that matches their needs.
Data remains the most important tool for insurers
Data is the game-changer today; fortunately, it’s readily available to insurers at any moment to answer key questions. A report from McKinsey shows just how data as a business model is working within the insurance industry. Large health insurance companies, for example, are utilizing data to enhance their existing business models to focus on cross-selling and reducing customer churn. They are using it to build relationships between brokers and carriers. In addition, they are using it to change the relationship between customers and insurers through real-time visualization and monitoring. For example, by tracking customer habits and behavior, it’s possible to improve insurance reach and create customer-specific coverages.
Improving compliance in an ever-changing landscape
There is a growing set of compliance rules in the insurance industry. These rules define how insurers must operate when providing the products and services customers need without overstepping legal boundaries. It’s important to have access to data, yet it is also important to minimize the risk of oversharing information that could be considered confidential material. In a paper published by the U.S. National Library of Medicine and National Institutes of Health, it’s clear that this is a growing concern. Finding the proper link between patient compliance trends, while still integrating clinical and insurance data, can be quite a challenge.
However, digitalization enables insurers to minimize the risk that data will be improperly exposed. It also provides an effective risk-management solution across the board. This becomes essential when it comes to properly managing the gathering and utilization of data, as well as the overall management of policyholder files.
Moving to a digital model simply makes sense
Many factors contribute to the success insurers are seeing by moving towards a digital landscape. These include improved end-to-end business processes with fully integrated systems that make front- and back-office management efficient and effective. It includes digital methods for monitoring success factors while helping businesses make better decisions. By engaging customers and partners, while also meeting all compliance requirements, insurers can overcome the challenges in today’s market.
The question is no longer whether to move towards digitalization, but rather how and when to do so. Within any company, there are many factors that contribute to the ability to transform. To explore the available options, download the SAP Cloud for Insurance brochure. This brochure explains how a switch to digitalization can be effectively accomplished, as well as exactly how it will benefit your business. And for more information regarding SAP’s Insurance Suite, please visit SAP for Insurance.