Radical change in the insurance industry is occurring at a rapid pace. Disruption in technologies, in business models, in standards, and in the makeup of insurance companies themselves demands constant adaptation.
Driven by competition from new insurance and insur-tech players, rising consumer expectations, and emerging technologies, insurers must respond to rapidly changing customer opinions and perceptions while still complying with all standards and regulations.
It is no small task, one that requires a fundamental re-imagining of business models. Insurers must meet the challenges from competitors by adopting digital technologies and an innovative approach that enables rapid solution development and deployment based on measuring and understanding customer sentiment.
But how, exactly, can organizations move forward? To stay relevant in the changing business environment, leading companies in the insurance industry are taking up the following three strategic priorities:
To create consistent, loyalty-building experiences in a multichannel environment, insurers seek ways to analyze each customer’s behavior and point of view – using connected people, devices, and external data sources to build an effective engagement model.
The goal is to create best-in-class experiences at every touchpoint including enrollment, policy renewal, claims processing, and more. Real-time simulation and analysis will be leveraged to evaluate the financial implications of strategic business choices.
Execution depends on a 360-degree view of customers. Such a view will help enable a true omnichannel model where insurers can interact with their customers on a continuous basis across multiple channels, from Web to direct sales, including Internet of Things (IoT) connectivity.
Insurers moving in this direction can extend the customer record to include a real-time view of the policies in place, with an evaluation of coverage suitability. They can use Big Data combined with analytical capabilities to provide customers with real-time financial information and offer recommendations for improving their financial status. They can also collaborate with customers in a 360-degree manner, from sensing demand to delivering value through new products and services. The results include increased customer loyalty, new customer acquisition, and greater customer satisfaction.
Today’s customers expect protection services that help prevent potential losses before they happen – and insurers are striving to meet such expectations. But to move forward, insurers need to align their internal and external workforce to be able to provide products and services that go beyond traditional insurance products.
Configuration modeling tools can help. With such tools, insurers can more effectively tie customer needs to specific options and features. This can help when bundling insurance coverage across lines of business with non-insurance products and protection services.
Increasingly, insurers are creating new product offerings based on a customer’s usage of connected devices, such as offering telematics data to policyholders with recommendations for safer behavior. They can also initiate responsive reactions to events, such as emergency services for accidents and police for home intrusions. Protection services can even include the deployment of proactive fraud-prevention capabilities and the use of blockchain to enable more secure transactions and processes.
Insurers today seek ways to anticipate customer behavior, such as policy cancellations or renewals, with instant insight from transactional data and digital interaction points. Others seek to build real-time data platforms that can help manage risk, protect investments, and enable compliance with accounting regulations.
Getting there, however, requires insurers to design product offerings based on insights from the data collected from Internet of Things (IoT) applications and related insurance services. Insurers, thus, are extending the use of sensors and telematics to develop holistic umbrella coverage for all aspects of insurance. They are also partnering across various industries (such as automotive, banking, public sector, and professional services) to automatically integrate everything that impacts the policyholder – such as warranties, wire transfers, government regulations, and service providers.
By constantly analyzing experience and operational data, insurers can achieve a more holistic understanding of human experiences. This, in turn, is enabling insurers to more quickly or even preemptively to understand and adjust their strategies to drive immediate top- or bottom-line impact.
The future is bright
While change is certainly afoot in the insurance industry, the future is full of opportunities for organizations willing to undertake the work of digital transformation. And as industry after industry undergoes its own digital transformation, insurance companies are in a better position than ever to become partners in their customers’ lives. Those that do will cement their place for years to come with a new generation of consumers who live online.
Join our virtual event to learn more
Want to find out more about the latest trends and innovations in today’s global insurance business? Register today to join our flagship 60-minute virtual industry event:
SAP Industries Forum 2020: Insurance
Experience the Intelligent Enterprise
Wednesday, March 25, 2020
9:00 a.m. PDT | 12:00 p.m. EDT | 5:00 p.m. CET