Aggiornato il 19/04/2022

The Age of Insurance 4.0

Insurance 4.0 is already a reality. Innovation and the development of insurance services are now closely linked to the increasingly constant presence of digital technologies and sustainable development. A decidedly path to be taken for the growth of companies, but above all to improve and increase what is the customer experience. Although the insurance sector is at the bottom of those affected by the Analytics market, however it is the one characterized by the highest growth rates. Sign of a vitality that sees the progressive expansion of the use of Big Data as a lever to strengthen insurance especially on the front of a customer-friendly customer experience.

The insurance industry needs to engage in creating simple, direct and unique experiences, with the goal of making them more fluid and contextual throughout the customer journey.


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Digital transformation and customer acquisition

With Insurance 4.0, acquiring new customers is easier for insurance companies. This is demonstrated by the proliferation of companies present almost exclusively on the Internet and without physical branches in the territory.

Looks like the keywords are “connected” and “open”. The insurance market is set to change with the advent of a new business model, which revolves around digital transformation and the use of IT (Information Technology).

This means a real renewal of processes and business organization. To take full advantage of the opportunities offered by IT and Digital Transformation, insurance companies are equipping themselves with data-driven architectures, aimed at collecting all the relevant information about the customer and stakeholders. The goal is to redefine processes and skills, promoting change according to a digital logic.

So, before we even address the crucial issue of customer retention, let’s see how the main resources of digital transformation can bring new ones online. The affirmation of cloud computing and the ability to manage huge amounts of data (Big Data) has made available to insurance companies a wealth of knowledge never before had.

It is thanks to this heritage that it is possible to keep track of the buyer’s journey of consumers through the interactions that they themselves put in place during the relationship with the brand. All the more so because it is especially the Millennials, an audience that is around 1.8 billion people – equal to 23% of the world population (source: ilsole24ore), to prefer the web to document and choose the product that suits them best; as well as being more inclined to give your data in exchange for services such as subscriptions to newsletters, download of information material, request for quotes etc.

Insurance 4.0 and technology

The technologies that come in aid of this “new” insurance sector, the so-called Insurance 4.0, are different.

Starting with mobile technology and applications. The development of dedicated applications by insurance companies has allowed companies to reach a much wider audience than before. This method can be particularly relevant for companies not yet widely established, allowing them to stay in close contact with their customers, offering them assistance and support.

Smart Contracts, instead, are contracts written through programming codes and can be read on any device. It is a document with full legal value that goes to replace and, if we want, delete the printed document. The aim is to allow the closure of contracts even at a distance, without the need to move or have an intermediary. To this is added a perspective certainly much more time to corporate sustainability.

Finally, a third technology is represented by Artificial Intelligence. 40% of insurance professionals have not yet considered the use of the AI (source: Deloitte). But why is it so important? Of course, there are already applications aimed at optimizing services but AI is useful for the discovery of new information on operations and interactions with customers. Investing in AI means evaluating the data available and accessible from the outside and using this data to improve your strategy. The benefits are different:

  • Damage estimation and real-time claims management,
  • Reduced personnel costs and tailored insurance;
  • Recognition of fraud;
  • This way you can optimize and maximize the customer experience

Flexibility + customization = engagement

How to retain customers online? In the light of the above, the road to engagement must include flexibility and personalization.

With Insurance 4.0, more insurance companies are offering their third-party auto liability customers ongoing support based on sophisticated technologies that combine telemetry systems, such as a ‘black box’ device, with a contact center that can be reached 24 hours a day, 7 days a week. They even encourage their use by proposing cheaper plans precisely because of the greater control that these devices provide. In addition to monitoring position and speed, the black boxes accumulate data on our habits at the wheel and help to profile us based on how we actually drive, rather than on generalized statistics.

Until we fit in predictive diagrams that calculate our risk potential risk, the insurance company bears having us as customers. From this comes a proposal for a policy that, year after year (with the goal of customer loyalty), becomes more and more precise: flexible, because it does not apply mass standards; personalized, because it is based on our actual record (How many accidents? What is our average speed? On what kind of roads do we usually travel? What is the level of wear on the mechanical components of the cars we drive?


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How to cultivate the customer experience

All this information should not lead to the error of cataloguing the insured in fixed schemes but should serve to provide the foundation for cultivating a stable relationship based on their needs. In short, the customer experience that is built before, during, and after the conclusion of the contract is at stake.

To retain a customer online, therefore, requires a regular presence in the customer’s life, perhaps by sending an email that reminds him of deadlines or that simply keeps him updated on policy or other changes that affect him. Even better so if the email also contains an engaging video with their personal data and his or her policy situation. Rather than only contacting the insured when it is time to collect, you should convey the message that the policy is an important tool whose value lies in the care and protection that is available. In doing so, it’s important to remember that digitization has opened up new frontiers in marketing automation that also allow Insurance 4.0 to manage the relationship with advanced tools (designed for systematic and recurrent programming of ad hoc communications).

Insurance 4.0: Where claims can also increase customer loyalty

In the age of Insurance 4.0, loyalty may also be achieved through claims. In the past, damages would be assessed in person by adjustors, and there were many forms to fill in and return. Today, customers can simply share photos and videos with their insurance company in real time and through automated chatbots.  This reduces the waiting period and reduces the workload of claims processors, and the information provided by the customer is cross-checked with the data extracted from the black box or other similar devices, to ensure accuracy and protect against fraud. (see, for example, black box) in order to avoid potential fraudulent actions.

This represents the initial filter for speeding up the process. Automation of the claims process is becoming a distinctive element of competitive advantage. A satisfied customer will stay with the company that has saved him time and that has proven quickly resolve his problem. This is how companies inspire loyalty over time.