Author: FINAOStarterAdmin

The insurance industry has been around for centuries and has been built on principles that have stood the test of time. However, in today’s fast-paced world, the industry needs to adapt to changing customer needs and technological advancements. Unfortunately, the industry has been slow to embrace change, and old-school thinking is holding it back. In this blog, we will explore how old-school thinking is limiting the insurance industry’s potential.

Resistance to change

The insurance industry has always been a conservative industry, with a risk-averse culture. This culture has made it challenging for the industry to embrace new technologies and changes in customer preferences. Insurance is an industry that has traditionally relied on face-to-face interactions with customers and paper-based processes. However, the rise of digital technologies has disrupted this model, presenting both opportunities and challenges for insurers. While some insurers have embraced digital transformation, others have been slower to adapt, often resisting digital change.

One reason why insurers may resist digital change is due to their legacy IT systems. Many insurers have invested heavily in IT infrastructure over the years, and their systems may be outdated and difficult to upgrade or integrate with new technologies. Upgrading these systems can be costly and time-consuming, which can be a barrier to adopting new digital tools.

Data privacy and security concerns are also major considerations for insurers. Insurance companies deal with a lot of sensitive customer information, such as personal and medical data. Adopting new digital tools and platforms may raise concerns about data privacy and security, and insurers may be hesitant to take risks in this area.

Another reason why insurers may resist digital change is due to their traditional business models. Many insurers have long-standing relationships with customers that are built on face-to-face interactions, and they may be hesitant to switch to a more automated, digital approach. This is especially true for insurance products that require a high degree of personalization, such as life insurance.

Furthermore, there may be a lack of understanding or awareness of the potential benefits of digital transformation. Insurers may not fully appreciate the ways in which digital tools can improve efficiency, reduce costs, and enhance the customer experience. This lack of understanding can make it difficult to build a business case for digital change.

Finally, insurers may face regulatory or compliance issues when implementing digital changes. Insurance is a highly regulated industry, and insurers must comply with strict guidelines and regulations. Implementing digital changes may require additional regulatory approval, which can add to the complexity and cost of the process.

Despite these challenges, many insurers are gradually embracing digital change and adopting new technologies to stay competitive in the industry. Insurers that are successful in their digital transformation efforts are those that are able to strike a balance between maintaining their existing business models and embracing new digital tools and platforms. By doing so, they can leverage the benefits of digital transformation while continuing to serve their customers in the way that they prefer.

There are options out there, however. platforms like CoverGo help make the move to digital transformation a straightforward process and offer new options for insurers to expand their business.

Overreliance on traditional distribution channels

Insurance companies have traditionally relied on traditional distribution channels, such as agents and brokers, to sell their products to customers. However, this model has come under increasing scrutiny as digital technologies have disrupted the industry. Many insurers are now recognizing that they are over-reliant on these traditional distribution channels and are exploring new ways to reach customers.

One reason why insurers have been over-reliant on traditional distribution channels is that they have long-standing relationships with agents and brokers. Many insurance companies have established partnerships with these intermediaries, and they have become an important part of the distribution model. However, this model can be expensive, as agents and brokers require commissions and fees. Additionally, it can limit the reach of insurance products, as agents and brokers may only sell products in certain regions or to certain customer segments.

Another reason why insurers have been slow to adopt new distribution channels is that they may not fully understand the potential benefits of digital technologies. Digital channels, such as online marketplaces, social media platforms, and mobile apps, can provide insurers with new ways to reach customers and offer personalized products and services. These channels can also reduce costs and increase efficiency, as they require less human intervention.

Insurers that are successful in adopting new distribution channels are those that are able to strike a balance between maintaining their existing partnerships with agents and brokers and leveraging new digital channels. This requires a shift in mindset, as insurers need to view digital technologies as an opportunity rather than a threat. It also requires a willingness to invest in new technologies and platforms, as well as a commitment to innovation and experimentation.

Lack of personalization

Insurance is a highly competitive industry, and one of the key factors that can set insurers apart is their ability to personalize their service to customers. However, many traditional insurers do not often personalize their service to customers, instead relying on standardized products and services that are designed to meet the needs of a broad range of customers.

One reason why traditional insurers may not personalize their service to customers is that they have traditionally relied on a one-size-fits-all approach to product development. This approach is often driven by a desire to reduce costs and increase efficiency, as it allows insurers to develop standardized products that can be sold to a large number of customers. However, this approach can also limit the ability of insurers to tailor their products and services to the unique needs and preferences of individual customers.

Another reason why traditional insurers may not personalize their service to customers is that they may lack the data and analytics capabilities needed to do so. Personalization requires a deep understanding of customer behavior, preferences, and needs, and this requires access to large amounts of data and sophisticated analytics tools. Many traditional insurers may not have invested in these capabilities, making it difficult for them to personalize their service to customers.

Finally, traditional insurers may not prioritize personalization because they do not see it as a key differentiator in the industry. In a highly competitive market, insurers may focus more on price, product features, and customer service, rather than on personalization. However, as customers become more accustomed to personalized service in other industries, such as retail and hospitality, insurers may need to start prioritizing personalization if they want to stay competitive.

Complex products and services

Insurance products have traditionally been complex, with lengthy policy documents, complex language, and complicated pricing structures. This has made it challenging for consumers to understand what they are buying and has led to a lack of trust in the industry. Insurers need to simplify their products and services to make them more accessible to customers.

Many insurers have developed complex systems to manage their products and services, and these systems are often deeply embedded in their operations. As a result, insurers may be hesitant to change their processes and tools, as doing so could disrupt their entire business.

One reason why insurers have complex products is that insurance products are highly regulated. Insurers are required to comply with a range of regulations and guidelines, which can make it difficult to simplify their products and processes. Additionally, insurers may need to work with multiple partners, such as reinsurers and underwriters, to develop and manage their products, which can add to the complexity of the process.

Another reason why insurers may be hesitant to change their processes and tools is that they have invested heavily in their existing systems. Insurers may have developed custom-built systems or purchased off-the-shelf software that has been tailored to their specific needs. These systems may be highly customized and integrated with other systems, making it difficult to switch to new tools or processes without significant investment and disruption.

However, the complexity of insurance products and systems may also be a barrier to innovation and change. Insurers that are unable to adapt to changing customer needs and market conditions risk losing market share to more agile competitors. To stay competitive, insurers may need to prioritize innovation and invest in new tools and processes that can help them better understand customer needs and preferences.

Conclusion

The insurance industry needs to adapt to changing customer needs and embrace new technologies to remain relevant in today’s fast-paced world. The industry needs to move away from old-school thinking and embrace a culture of innovation, flexibility, and customer-centricity. Only by doing so can insurers meet the evolving needs of customers and thrive in an increasingly competitive market.

Are you an insurer looking to break from old-school thinking and dive into the world of digital transformation? Contact the team at CoverGo today, and one of our experts will walk you through how platforms like ours help insurers stay ahead of the game.

To survive the hyper-competitive market, it is imperative for insurance companies to deliver efficient services at a minimal cost. In fact, cost saving is no longer merely a good practice to embrace — it occupies the top position on every decisionmaker’s wishlist as it has slowly become a strategic priority. The pandemic has unleashed a financial strain that has forced insurers to look at streamlining operations with a leaner cost base. 

At the same time, traditional approaches are no longer enough to tackle the cost issue. In order to keep pace with changing customer expectations and intense competition, insurance companies need to use innovative methods for strategic cost savings. Realizing the potential of insurance technology is one means to this end. 

Here’s a look at ten ways in which the use of insurtech can have a huge impact on cost savings.

1. No code, No Cost

Launching new insurance products is an area where companies spend a chunk of their money. Traditional approaches involving programmers and developers turn out to be a money pit, with companies continuously spending on monolithic code systems and resources.

To save on product building costs, it is prudent to move to no-code platforms where simple drag and drop without a single line of code can create new products. You no longer need to spend excessively to recruit top-notch software developers or even spend months on developing new software — you can speed up the product development cycle and reduce sunk costs by supplying your existing team with no-code tools to simplify their work. Doing so also helps to save on s operational costs of rectifying errors and doing paperwork. 

With CoverGo, you can access an easy-to-use interface plugged with a variety of drag-and-drop tools that makes it incredibly easy for anyone to create custom-built insurance applications without any prior training in software development. 

2. Access to data insights 

Harnessing the true potential of data insights can be a game-changer for insurance providers. 

Research shows that investing in big data analytics can help companies save anywhere between 40 to 70 percent in costs as it automates several manual processes, and improves risk assessment and underwriting processes. This not only saves customers from paying hefty premiums but also prevents insurers from missing out on key risks and identifying fraud early on. In fact, it is estimated that in the United States alone, insurers have to deal with fraudulent claims costs worth USD 80 billion per year, which makes up approximately 10% of the total payouts. By employing data analytics, fraud-detection processes become quicker and more accurate. Companies can rely on historical data to prune out claims that are highly probable to be fraudulent and save on costs. 

Analyzing data trends can also help insurers better under the needs of their customers and suggest relevant products through a host of self-service tools. This can boost customer satisfaction and also help companies deliver a superior customer experience. Instead of spending a chunk of the marketing budget on pushing products customers don’t need, insurers can harness critical data and target customers with exactly what they need. 

3. Reduced cost of customer acquisition 

Historically, customer acquisition costs have been higher in the insurance sector due to hesitancy toward adopting digital technology. In fact, research shows that it is seven to nine times more expensive for insurers to get new customers compared to retaining existing ones. The focus has always been on investing very heavily in advertising to get noticed by more prospects. Except, the returns may not be worth it.

It is important to remember that every potential customer is looking for swift delivery, round-the-clock availability, and an easy-to-use interface when shopping for insurance products. They are looking for full transparency in pricing and the value delivered by the policy. Adopting the right technology can help insurers completely transform how customers view insurance, making it more approachable and easier to access. You can present a blend of product and pricing innovation to target price-sensitive consumers and retain them.

For example, using AI models for pricing can help insurers create unique dynamic pricing models for low-risk customers. So someone who doesn’t drive as frequently can buy a policy and pay a lesser auto insurance premium than those driving frequently. Even for such infrequent drivers, premium incentives can be provided on the basis of their driving behavior. By increasing the overall value of the product, companies can save big on acquiring new policyholders. And lesser it costs you to acquire a single customer, and the more value you provide, the more profit you can make. 

4. Improved customer retention

Retaining existing customers is just as important for saving costs as reducing the cost of getting new customers. Since the cost of retention is lower than the cost of acquisition, it should become a priority for insurance companies.

Insurtech can massively benefit insurers in retaining customers as technology makes it easier to roll out new products and policies, streamline the claims process, and provide effective customer service. 

In other words, bettering customer experiences is critical for cost savings. Bad experiences during customer service can force existing policyholders to shop for a new provider. But when insurance companies use tools such as predictive routing to match the right agent to the right customer, they can easily reduce the costs associated with customers reaching out to call centers for help. 

5. Improved innovation at a reduced cost 

While pursuing innovation is critical for outranking the competition, it should be pursued in a systematic manner. But cracking the code of successfully innovating without breaking the bank requires a little more than strategic planning alone.

Insurance companies that embrace digital technology can win big — not only can they reduce the bottlenecks in the product development cycle, but they can also roll out newer products much faster than their counterparts at a reduced cost. 

All the key facets of product innovation, including updating existing offerings, maintenance of existing systems, and undertaking incremental changes, can be experimented with without incurring the astronomical costs usually associated with it. 

6. Automation

Automating repetitive and time-intensive tasks by leveraging technology can not only make them more efficient but also help insurers make huge cost reductions. 

For example, policy management involves a lot of manual work for insurers. After the pre-underwriting checks are performed, they still need to deploy resources for issuing the policy and updating information within the system. During peak months, companies may be forced to hire temporary staff, increasing the company’s costs. 

Automating this process using an insurance automation solution that extracts key data points from all relevant documents and feeds them into the system in a structured manner can result in greater operational and cost efficiency. 

7. Reduced response times through chatbots 

Gone are the days when customers would flip through the FAQ section of the website to get their queries answered. In the age of microwavable popcorn, customers expect instant responses, and this is where chatbots can come in handy.

It is predicted that deploying more conversational chatbots on the website, and mobile app of insurers can help insurers save almost USD 1.3 billion by 2023. As digital native customers are increasingly expecting service providers to utilize the least disruptive ways to provide 24/7 responses, investing in inexpensive chatbots seems like a no-brainer.

Chatbots can also be configured to ensure that they provide actionable insights to the customer based on their queries instead of stalling the conversation completely as soon as the chat goes beyond the realm of answering FAQs alone. By delivering more efficient customer service, chatbots can reduce the scope for human errors and generate bigger savings in operational costs.

8. Predictive analysis 

Modern predictive analytics tools can comprehensively analyze different data points through techniques such as data mining, artificial intelligence, deep learning, and machine learning. Insurers can use the information to formulate underwriting and also optimize various business processes.

For example, predictive analytics tools can be used for direct marketing by identifying potential markets. Companies can also save on operational costs by not contacting such prospects who are unlikely to respond by getting the tools to analyze key demographic data that provides insights into the behavior patterns of such prospects. 

9. Embedded insurance 

Embedded insurance refers to products that are not sold to customers on an ad hoc basis but are provided by embedding them on a platform or a marketplace. For instance, every bank adding a complementary life insurance policy with every home loan provided is embedded insurance. 

Opting for embedded insurance helps insurers to lower their distribution costs as they can rely on partner distribution channels and their relationship with customers. This ensures that only those customers are targeted and offered insurance where it matters to them the most. It also helps companies build their presence in the market a lot faster and save on onboarding costs. It also results in lower premiums, incentivizing potential customers to buy more products. 

At CoverGo, you can use the insurance product builder with 500+ insurance APIs that can be easily integrated with any legacy or third-party system and embedded with different policies without a single line of code. 

10 – Implementing effective claims management 

Insuretech solutions help claim processes become superior and more cost-effective.

For instance, if someone calls to report that they have lost their three-year-old iPhone, the person handling the claim should be able to look up the item’s depreciated value at the click of a button.

 This can only happen when insurers standardize their processes, right from reporting the insurance claim to the various back-end activities involved in processing the claim. Identifying various inefficiencies and bottlenecks can create a massive impact on cost savings by preventing claims leakage. Insurtech provides an opportunity to digitize end-to-end processes by consolidating and modernizing them and introducing higher levels of automation. 

Conclusion

There is no “one size fits all” solution when it comes to embracing insurance technology for cost savings. What cost savings mean for different insurers depends on the context. But insurtech provides various avenues for optimizing the insurance model and reducing costs. These solutions are no longer simply good to have — they are beneficial for both insurers and end customers.

The insurance industry has undergone a massive overhaul thanks to the advent of technology. Regardless of the size of the business, companies across the globe are looking to add more capabilities and implement evergreen solutions to scale their business to meet the changing demands of their customer base. The investment in insurtech was a whopping $15.4 billion in 2021, almost double the amount raised in 2020.

There is an ever-growing demand for automated experience in every sphere of life, and insurance is no different. In fact, embracing these technology trends is the only sustainable way of getting an edge over competitors.

Curious to know which insurance technology trends will reign supreme in 2023? Here’s a list of 10 trends to watch out for:

1. No code software development 

 Survival in a hyper-competitive market demands that insurers constantly wow their customers. This can mean creating unique enterprise systems or getting a third-party developer on board. Given the cost of building something new from scratch and the perpetual shortage of quality developers, the first option may not be feasible. While third-party developers are more affordable, there can be quality concerns. 

This is where opting for no-code software development can be revolutionary for insurers of all scales and sizes. Compared to traditional programming, where manual coding is a must, no-code software development makes it easy for everyone to build an app without a line of code. Platforms such as CoverGo offer an easy-to-use interface equipped with a variety of drag-and-drop tools, making it effortless for someone without any training in software development to create custom-built applications. 

Apart from saving money, it also makes it easier for insurers to focus on developing products that address customer pain points and automate their workflows instead of getting stuck in endless product cycles even for releasing simple applications.

2. Embedded insurance 

Embedded insurance refers to real-time bundling and sale of insurance policies at the point of sale of a product or service. 

There is a gap worth $1.2 trillion, between the amount of insurance a customer should get and the insurance purchased. As getting a one-off insurance policy can be tiresome for customers, involving a fair bit of groundwork, embedding an insurance policy in non-insurance products is a great way to bridge the gap. For instance, auto-insurance policies can be sold along with the vehicle, minimizing the chances of customers not taking one, as finding the right policy suited to their needs can be time-consuming.

Embedded insurance can also make it easier for insurers to dive into newer markets and expand their reach. This trend can help established businesses make inroads into developing markets where selling policies to customers directly may be an uphill task.

CoverGo’s insurance product builder offers 500+ insurance APIs that you can easily integrate with any legacy or third-party system and embed different policies anywhere you need, without a single line of code. 

3. Omnichannel distribution

Creating a seamless omnichannel journey is essential for delivering a superior customer experience. 

Omnichannel distribution channels make it easier for insurers to offer personalized policy recommendations to clients as they can collect data through cookies and mobile apps. An omnichannel ecosystem also allows insurers to assist the customer through each stage of their journey and learn more about a customer’s action that directly impacts the insurance policy they wish to get. 

Any insurer wishing to stay relevant in 2023 must work towards a user-centric and omnichannel strategy. This includes making it easier to purchase policies online, navigating through customer journeys quickly, and integrating sales and support solutions. Insurers should also understand that digital initiatives are not yet another channel to reach out to customers — they can be the merging point of online and offline worlds and can be leveraged to deliver a highly personalized experience. 

For instance, a true omnichannel experience can be when a prospect can scan a barcode from the documents of their new car, upload it on a portal, and instantly receive insurance quotes.

With CoverGo’s front-end enabler, insurers can build flexible and responsive front-end websites, microsites, and client or agent portals within a few days without any code. These white-label front-end applications can then be used for instant omnichannel distribution.

4. Internet of Things

The Internet of Things (IoT) is all about embracing digital transformation in the insurance industry. A McKinsey research reveals that there are approximately 127 new devices plugged into the internet every second, and there will be 43 billion devices by 2023. 

 If you are serious about delivering a better customer experience and boosting brand loyalty, you need to allow IoT devices, such as wearables, home, and automobile sensors, etc., to access relevant data relating to the policyholder and distribute it through your network. This can help to speed up the claim process and minimize duplicate work. You can save a customer’s time by letting the devices fetch sensitive data and deliver it to your interface to handle the claims more effectively. Forbes predicts that IoT can also help insurers to reduce the cost of the claims process by 30 percent. And the good news is that IoT can work for any type of insurance business, whether you sell life or casualty policies or straightforward commercial ones. 

IoT can also make the risk assessment process more accurate and allow policyholders to work out the policy pricing. 

5. Chatbots 

Chatbots are a powerful tool for current insurers to help them meet customer expectations. Investing in developing sophisticated chat widgets powered by bots can substitute live agents and make customer service more seamless. 

Here are some other ways in which chatbots are beneficial for the insurance sector:

• They offer round-the-clock assistance to customers

• They can collect visitor information

• They can help to qualify leads and show them appropriate policy recommendations

• They can answer FAQs about policies offered

• They can automate the claims process 

In 2023, insurers can place chatbots on their website and app. Based on requirements, chatbots can be either AI-powered (using natural language processing to provide the right answers to user questions) or rule-based (operating as per pre-defined flows).

6. Artificial Intelligence (AI)

When it comes to delivering a personalized experience in the insurance sector, AI will play a massive role. From distribution to underwriting risks, there is virtually no aspect of the business that cannot benefit from adopting AI. 

 When it comes to processing massive amounts of customer data to provide a curated and customized offering, leveraging AI can be a game-changer for insurance companies. Moreover, reduced churn time and removing the human element aids in real-time service delivery, which is key for customer retention. 

The deluge of connected consumer devices such as smartwatches, smartphones, home assistants, and cars can provide insurance companies with all the relevant information about a potential customer’s profile. Using AI algorithms, companies can create risk profiles, identify the exact product to offer, and reduce the purchasing time to just a few seconds. 

AI will also play a key role in claims processing, which has been a significant bottleneck for most customers. Utilizing appropriate AI solutions to remove agent intervention for filing claims, deploying more virtual assistants for handling low-cost but high-volume claims, and implementing NLP (natural language processing) for extracting relevant text from printed documents to streamline the claims process can be transformative. 

7. Predictive analysis 

Embracing predictive analysis can go a long way in improving the accuracy of insurers, especially those offering property and casualty coverage. 

It can also help identify outlier claims that suddenly become high-cost losses. Using predictive analysis, insurers can thoroughly review claims raised previously for similar losses and identify potential complications early on. 

Additionally, predictive analysis can provide insurers with relevant data for identifying various factors that can impact the claim outcome and make decisions to enhance efficiency. In turn, this can streamline the claim process and mitigate the risks that traditional claim processing poses. 

8. Telematics 

In simple terms, telematics for insurance means offering usage-based coverage. This can be offered as a wearable tech for car insurance policies. Insurance companies can comb through the analytics and work out the policy premium by equipping the car with monitoring devices. They can offer flexible plans such as pay-as-you-go (based on mileage) or pay-how-you-drive (based on driving behavior). Moreover, since most customers have a GPS-enabled smartphone with them while they are driving, insurance companies can also partner up with GPS providers to collect relevant data about the driving habits of the customers.

Telematics benefits both auto-insurers and policyholders. For insurance companies, it offers an excellent opportunity to know about the driving behavior of customers even before they start looking for auto insurance policies. Additionally, inking insurance premiums to actual usage helps insurers offer better premiums to their customer, leading to greater customer satisfaction. Gaining deeper insights into customer profiles regarding their driving habits also enables insurers to estimate the damages more accurately and minimize fraudulent claims. 

For policyholders, telematics promotes better driving habits and incentivizes them to pay closer attention to vehicle usage. Customers are not forced to pay an arbitrary amount as a premium, as the calculation is done based on usage or driving behavior. 

9. Drones

Drones are no longer restricted to military or security operations. 

Since 2017, when Hurricane Harvey hit the US, insurers have been employing drones to expedite the claims process. Over the years, the popularity of drones in the insurance sector has soared, and predictably, more insurers are likely to embrace unmanned drones by 2023. Moreover, as clients expect a seamless digital insurance experience, insurers can gain immensely by embracing state-of-the-art technology for their business. 

The biggest advantage of using drones is that insurers can access high-quality videos and images from locations that may be otherwise difficult to access. Speedy access to such critical data can be extremely helpful for claims processes arising out of property & casualty insurance policies. As drones make it less risky to inspect damaged properties, surveyors working for insurers don’t have to risk their lives to decide on the claims. Streamlining data access through drone footage can increase efficient reporting and also ensure accurate evaluation of the damage caused. This can, in turn, avoid disputes regarding the insurance payout. 

10. Greater self-service capabilities 

Opting for self-service portals to improve customer experience is predicted to become an important trend in 2023. Such portals can simplify how policyholders get their insurance, management of claims, insurance accounting, and premium payments, and ask questions about different policies. 

For tech-savvy customers, where 72.7 percent prefer applying or renewing policies online, and 57.6 percent expect their insurers to offer digital policy management, self-service portals can be an excellent trend to follow. 

Adapting to appropriate software solutions for self-service can also bring down the cost of customer acquisition and boost retention. It can also improve agents’ productivity by freeing up their time otherwise spent consulting with the customer.

Conclusion

To sum up, the insurance industry must keep up with technological developments expected to be game-changers for 2023. The faster they adapt, the more likely they will remain relevant. The trends shared above can completely transform your relationship with your customers. So what are you waiting for? Act right away to strengthen your market position next year.

Frequently Asked Questions

What are Insurtech trends, and how are they shaping the insurance industry?

Insurtech trends refer to the innovative technologies and digital solutions that are transforming the insurance sector. These trends include artificial intelligence, blockchain, telematics, and data analytics, among others. They are reshaping how insurance companies underwrite policies, process claims, and interact with customers, ultimately improving efficiency and customer experience.

How is artificial intelligence (AI) being used in the insurance industry, and what benefits does it offer?

AI is being employed in various ways within the insurance sector, such as automating claims processing, enhancing risk assessment through predictive modeling, and personalizing customer experiences through chatbots and virtual assistants. AI-driven automation reduces operational costs, minimizes fraud, and speeds up claims processing, ultimately leading to cost savings and improved customer satisfaction.

How are telematics and IoT devices impacting the insurance industry, particularly in auto and property insurance?

Telematics and Internet of Things (IoT) devices, such as vehicle sensors and smart home devices, allow insurance companies to collect real-time data on customer behavior and risk factors. In auto insurance, telematics devices track driving habits to provide usage-based insurance, while in property insurance, IoT devices can detect and prevent damage, leading to more accurate pricing and reduced claims.

What role does data analytics play in the evolving landscape of insurance technology?

Data analytics plays a crucial role in insurance by helping companies analyze large volumes of data to make informed decisions. Insurers use predictive analytics to assess risk more accurately, set premiums, and detect fraud. Customer behavior analytics enable personalized product recommendations and targeted marketing efforts, enhancing customer engagement and retention.

Over the last few years, the insurance industry has been undergoing a digital transformation thanks to the adoption of consumer technology. The proliferation of mobile phones in every customer’s pocket, digital-first applications appearing in many institutional organs like banking and government, and easier online-only services have led customers to no longer tolerate digital-first approaches, but demand them.

It’s a convenience of opportunity for both businesses and customers, and the insurance industry is in the throes of catching up to customers’ digital needs. 

Predictive analysis, artificial intelligence, and machine learning are some of the key ways which have led to a vast digital transformation

This has been an extremely critical move to keep up with the customers’ demands. In the hyper-competitive insurance industry, any business that wants to stay afloat has to constantly think about innovating the customer experience.

Even though customers across industry verticals continue to view the experience offered to be just as important as the product or service sold by a business, there is often a mismatch between what’s expected and what’s delivered.

As a leader in digitalizing the experience and products that insurers deliver, we at CoverGo are here to help you identify what the customers expect and how insurers can take the customer service experience to the next level by adopting a digital-first experience.

What are the customers looking for and how can you improve their experience?

Insurance is no longer merely a financial instrument that people want to buy. Modern-day customers want insurance to be something more than only providing a cushion in times of need — they are looking for a more personalized digital experience to maintain their loyalty. Here’s a look at the key trends that have emerged until now:

Omnichannel customer servicing 

It is no longer enough for insurers to strive to deliver excellent customer service. In fact, simply being online is not even enough. They need to engage and continue engaging customers through their preferred channels of the customers, such as email, messenger apps, chatbots, etc. In industry parlance, this is called omnichannel customer servicing, or simply omni-channel distribution. Delivering such an experience throughout the customer journey seamlessly can make an insurer stand out from its competition. 

A report suggests that over 50% of insurance customers use three or more channels when researching new policies to purchase. Each channel offers unique benefits to them, making omnichannel customer engagement a go-to option. Moreover, after purchasing a new policy, customers prefer omnichannel engagement, such as using the chatbot on the insurer’s website to clarify any queries, using smart wizards to set up new purchases, managing current policies, and more.

For current clients, customer engagement is a passive strategy to keeping those customers by not just engaging them on the channels they prefer, but putting the control of their account in the palm of their hands. Quite literally, mobile apps are a mainstay of human interaction with their day-to-day needs.

While traditionally, the insurance business was centered around selling different products through a network of agents, there is a pressing need for insurers to establish a direct line of communication with clients. That’s why insurers want to develop different channels to interact with them. But a key challenge faced while building newer distribution channels is integrating the channels into the native system of insurers. At CoverGo, our front-end enabler makes it easy to develop flexible and responsive front-end websites without using a single line of code that can be completely integrated into any third-party system.

We’re not saying that the days of the insurance agent are over either. Agents are highly skilled and knowledgable professionals who can translate the wacky world of insurance jargon into easily digestible products and boil down paperwork to something less intimidating to clients.

The nature of insurance agents in a world of digital-first experiences can be bridged by simply allowing for a medium where agents can engage clients through those very same channels they prefer. It just might so happen that the nature of their work might be less head-hunting and meeting clients with paperwork, and change into something of a hybrid between being an agent and also helping with current client engagement, almost like a point of first contact for anything just shy of customer support.

Having access to lifestyle apps 

To find out the appropriate health insurance product a customer should get, they need to get a series of medical check-ups done. This involves a visit to medical professionals. Often, it deters the customer from getting the right insurance product, especially if something should come up unexpectedly, and thusly impact their ability to get insurance products beneficial to them.

Lifestyle apps can make a huge impact in this segment. These apps can track a range of health and fitness metrics of customers, making it easier for insurers to offer customized policies. After all, clinical data such as heart rate, weight, height, blood pressure, etc., do not present a comprehensive picture of one’s health in the absence of finer details of lifestyle. Such apps make it convenient for customers to find the right product based on their unique risk factors and also help insurers to underwrite the risk by weighing in the distinct lifestyle factors for each policyholder. 

On CoverGo, you can create and configure new insurance products on our Product Builder platform without any code. These products can be fully integrated into your system. The key here is an insurer can quickly adjust products to match client profiles that thanks to lifestyle app datasets, show there are more varied and niche risk factors among many different lifestyles.

Better risk management services 

Risk management in insurance involves assessing and quantifying the loss that the insurer needs to settle. Digitizing risk management benefits both customers and insurers. For customers, it improves the quality of the overall service once a claim is raised. For instance, if customers have access to a mobile app that monitors the location of the insured item, necessary data related to the loss can be shared directly with the insurance company at the time of raising the claim. For insurers, digitized risk management promotes efficiency in managing risks and identifying unknown ones. 

What are the key challenges to delivering superior customer experience?

The massive amount of data makes the insurance customer lifecycle complicated. One of the crucial challenges faced by insurers is delivering the right product based on the needs of their customers. An easy fix is to identify who is the target audience, develop a buyer’s persona, identify their specific needs, and then place the product as a solution. Adopting a targeted sales approach based on how likely the customer is to purchase a new product and whether the product eases the customer’s current concerns can make the purchase process more efficient. 

Secondly, how customers look at insurance has changed massively. It is no longer about filling out a form and paying premiums yearly. Customers want to have access to policies and insurance resources 24/7 in a manner they can easily comprehend. Here’s where apps and websites become extremely important. 

There is a greater need for insurers to develop self-service portals that takes care of common concerns such as signing up for a new policy, renewing a policy, raising and settling a claim, reviving lapsed policies, etc., without any external help. Simplifying the process can go a long way in improving customer experience and making insurance more enjoyable. 

Not providing personalized insurance offerings can impede customer experience by bridging down both customer acquisition and retention. Being where your customers are and developing omnichannel customer support tools can help offer a more personalized and consistent experience. 

Lastly, a lack of transparency in the claims process can be a deal-breaker for customers. Customers feel more empowered to raise claims when they are armed with relevant information. CoverGo offers an easy-to-implement policy admin system that allows insurers to manage the entire customer journey, including the claims process, from a single portal. Not only is it modern and efficient, but it also helps insurers save time by automating critical processes. Moreover, it can also prevent unnecessary delays in raising and settling claims, leading to a better customer experience.

Is your company on the right path when it comes to customer experience?

If insurers are keen to move beyond a transactional relationship with their customers, emphasizing improving customer experience has to be the starting point. And adopting artificial intelligence throughout the lifecycle of a customer’s journey can go a long way in enhancing customer satisfaction. When customers feel known, served with the appropriate policy offers, raise claims seamlessly and receive payouts, instant policy refunds, or claim payouts, they are likely to have a better experience. 

Set up a demo with CoverGo to understand how we can help you step up your insurance business to design products and services centered around excellent customer experience. And without using any code.