New insurance era:How new technologies are reshaping the industry

Cynthia Ezekwe

The insurance industry is at the cusp of a revolution. The advent of digital technologies has ushered in a new era for the sector, one that is characterised by innovation and transformation. Insurers are harnessing the power of data analytics to streamline their processes, and are creating new products and services that are tailored to the needs of an ever-changing society.

The digitization of insurance is revolutionising the way customers interact with their providers. Traditional paper-based processes are being replaced by digital platforms that are more efficient and user-friendly. Customers can now manage their policies and claims with a few simple clicks, and are no longer burdened with lengthy forms and paperwork.

A recent blog post by InsurTech Ushur sheds light on how automation is revolutionising the insurance industry, especially when it comes to enhancing the customer experience. According to the blog, the claims process can be a source of stress and frustration for claimants, as they are already dealing with the aftermath of an unfortunate event.

Ushur argues that the current claims process is not only frustrating for customers, but also potentially detrimental to the business. This is as a negative experience can lead to customer churn, as they seek out better experiences with other providers.

James Doe, sales manager at Novidea, an insurance software solution firm, pointed out that the growing digitalisation of the insurance sector has led to a shift in consumer expectations, with consumers now demanding a more personalised and seamless experience. He added that in an increasingly connected world, consumers are used to having easy access to information and services on their phones and other digital devices, with insurers expected to offer similar experiences, through user-friendly online platforms.

Doe noted, “From the user perspective, whoever they are, quick and efficient applications that are intuitive to use whilst responding in the same way as your favourite search engine are essential.

This change in consumer behaviour puts pressure on insurers to invest in digital technologies to meet these expectations. Failure to do so can result in customer dissatisfaction and the loss of market share and challenges attracting the people you need and want to run your business the way you want to.”

Doe further stressed that digital transformation is not merely a means to level the playing field, but is actually an opportunity for insurers to stand out from the crowd. He believes that InsurTechs that successfully embrace digitalisation will be in a prime position to take advantage of the next wave of innovation and set themselves apart from their competitors.

“It is a confusing and somewhat bewildering world out there and there is every reason to look at digital transformation with contempt, fear, or loathing. But if you scratch beneath the surface, you will see that in your everyday life you are already getting the benefits (see mobile banking, shopping apps, weather apps, news online, etc.) and there is a logical and well-trodden path to move your business toward digital transformation without destroying the core of what made your business successful in the first place,” he stated.

The digital transformation of insurance is both exciting and challenging, as it presents both opportunities and threats for the industry.

On the one hand, digital technologies offer the potential to make insurance more accessible, efficient, and transparent. This could lead to increased customer satisfaction and improved financial outcomes for both insurers and policyholders.

On the other hand, digital transformation also poses new challenges, such as the threat of cyberattacks and data privacy concerns. Insurers must therefore invest in robust cybersecurity measures and ensure that their customers’ data is protected.

As the digital transformation of insurance continues, analysts have outlined the opportunities and challenges associated with the digital transformation of insurance as follows:

– The increasing demand for personalised, on-demand services.

– The need for insurers to rethink their business models and adapt to changing customer needs.

– The rise of InsurTech startups and the need for established insurers to adapt to stay competitive.

– The need to invest in data analytics and machine learning to stay ahead of the curve.

– The potential for increased risk from cyberattacks and data breaches.

– The need to balance the benefits of data-driven decision making with privacy concerns.

To this end,  the digital transformation of insurance is both a threat and an opportunity for the industry and it is recommended that insurers embrace new technologies and adapt their business models to meet the changing needs of their customers.

While there are many potential risks associated with the digital transformation of insurance, analysts say these can be mitigated through careful planning and preparation. Therefore, insurers are expected to adopt a risk-based approach to the digital transformation, identifying and assessing potential risks, and developing strategies to mitigate them. By taking proactive steps to protect themselves, insurers can ensure that the benefits of the digital transformation outweigh the risks.