Updated on 05/12/2022
The challenges of digital insurance
From document dematerialization to personalization in the insurance industry: the digital strategy must move from dematerialized document management through Cloud Computing systems. The ultimate goal? A new personalized relationship with customers. That’s what we’ll focus on in this post.
The insurance industry is facing new and more difficult challenges. They are the challenges of Digital Transformation: an unstoppable process that today is increasingly accelerated, produces continuous change, continuous improvement of processes, and new opportunities almost daily.
Of course, everything lies in being attuned to the changes, staying up to date, and keeping the business dynamic, elastic, and scalable. Essentially, it’s about knowing how to ride the wave of this continuous innovation.
In our current moment in time, digital transformation has become even more urgent. The Covid-19 pandemic has made it even more evident that the role of digital is decisive and indispensable for our world, and all the more so for the Insurance Industry. So, if companies are going to put the best digital strategy in place, what is our starting point?
The path to digitalization is one of three stages, which we have summarized as:
- Digitization of document processes;
- Cloud Computing;
- Digital and personalized Customer Experience.
It’s true: these three aspects are closely related to each other. And, if well implemented, they trigger a formidable virtuous circle that combines savings, an exponential increase in efficiency, and the improvement of brand reputation and loyalty.
In this post, we will follow the three stages of this path, elaborating on each as we go.
1. Documental digitization and dematerialization
The time of dusty archives and files of paper records is over. The reason is simple: the digital document has enormous advantages over its physical counterpart.
First of all, the advantages are financial, with the reduction of printing, preservation, and archive management costs. There are also clear savings in time (and time is also money): think about how complicated it is to search through documents by hand, examining stacks of sheets, and how simple it is to do search with a digital device, in just a few clicks, after an appropriate upstream indexing. With digital, moreover, compilation errors or risks of loss are drastically reduced. As a result, this increases the security of storage. Then, there is the fundamental issue of sharing documents in whole or in part: here too, as you can understand, digital is incredibly more efficient than the physical support.
Finally, there are more opportunities: digital document management allows you to conduct a precise, deep, and dynamic analysis of your customers’ data, which is the first step to achieve Customer Relationship Management that is tailored and “close” to your customers (and we will return to this later in the post).
The need, therefore, is to software that is tailored to the needs of each company. A winning example of this is Doxee document experience solutions.
A software that enables dematerialization must be able to:
- Classify internal documents as well as external documents received from suppliers, employees, and customers;
- Automatically archive these documents and index them in the most functional way (this is a fundamental step, as it enables you to be able to extract and cross-reference valuable data);
- To allow digital storage with the highest possible security, and in compliance with legal requirements;
- Automatically extract data from documents and be able to process structured data not just entire documents;
- Report errors and inconsistencies;
- Be able to integrate with the customer’s pre-existing platforms, applications, and systems;
- Be as flexible and scalable as possible. In other words, to be based on Cloud Computing systems (more on this in the next paragraph);
- To allow a wide range of personalization that can support the business requirements and structure of each company.
Before going further with our analysis of the best digital strategy for insurance companies, it is important to highlight an important issue: when talking about documents with legal value, the correct term is “dematerialization”, a concept that goes beyond simple digitalization.
Through the dematerialization processes, in fact, it is possible to completely eliminate paper documents, as digital counterparts assume a complete legal and evidentiary value. So be careful: this is not just a nuance of meaning; there are delicate legal aspects at stake. Also for this reason, it is essential to turn to careful and specialized companies during these phases of transition.
2. A flexible architecture based on the Cloud
First of all, the expenses for the purchase of hardware and software are reduced, thanks to the on-demand and pay-per-use perspective. At the same time, you can have huge amounts of computing resources available in a short time, and with great ease and flexibility. In short, we are talking about a powerful and easily scalable IT architecture. In short, we’re talking about lower costs and greater efficiency, in one fell swoop.
It’s no wonder, then, what emerged from a study by Gartner on “cloud shift”, which states that by 2025, 51% of IT spending will have gone from traditional solutions to public cloud, compared to 41% in 2022. Almost two-thirds (65.9%) of spending will go to cloud technologies in 2025, compared to 57.7% in 2022. In fact, in numbers, in 2022, more than $1.3 trillion of corporate IT spending is at stake for the move to the cloud, growing to nearly $1.8 trillion in 2025 (gartner.com).
The importance of dematerialization coupled with Cloud Computing in the insurance industry is crucial to understand costly, complex, and delicate nature of the production of documents such as policies, forms, and contracts of various types. Today, there is no better ally than digital to manage this complexity, to make everything simpler, more orderly, more secure.
The digital strategy for the insurance industry can only go through these steps:
- dematerialized and cloud-based document management;
- extract valuable data from these documents;
- apply deep and automated (as automated as possible) analysis and interpretation of this information.
The ultimate goal? To re-design the relationship with the customer, aiming at personalization.
3. An increasingly tailored Customer Experience
The real goal of smart and digitized document management for the insurance industry is twofold. On the one hand, the goal is to have maximum control over internal processes (with the resulting savings in terms of time and money, and increased efficiency); on the other hand to have in-depth knowledge of users, its insured, and divide it into increasingly specific segments, down to the individual person.
At the base of both sides there is something fundamental: the analysis of Big Data. Here, we come to archives, which have evolved from a bureaucratic task to a formidable tool to improve relationships with customers. All this, in turn, translates into a surge in loyalty. Customer loyalty is a very delicate topic, especially in the current scenario. The insurance market, in fact, has been constantly open, and it has become easier than ever for customers to move from one company to another: often just a few clicks are enough.
In many cases, what is the decisive aspect that pushes a customer to change company or, on the contrary, to remain faithful to his own? It most often boils down to the quality of their communication with the company: therefore the Customer Experience.
That’s why, according to a 2017 Gartner survey, as many as 81% of marketers expect the Customer Experience to be the main focus of marketing challenges over the next three years (gartner.com). This is in addition to a well-known statistic from a Bain & Company analysis: it costs a company 6 to 7 times more to win a new customer than to retain one.
So, we’ve said it, the top priority is for a company to improve its communications with customers, putting them at the center of the business. To do this, the most effective weapon is to learn about them, one by one, from their data. The next step is to address everyone, in a personalized way, with tailor-made communications.
This is not science fiction, but it is one of the possibilities offered by the most advanced digital CRM systems, such as those made available by Doxee, exploited by some of the most important players in the sector, such as Credem, PosteVita, or the French giant, AXA.
The latter case, in particular, is very interesting. AXA has chosen to rely on the services offered by Doxee to produce personalized and interactive videos sent via email to its customers, with the goal of lowering the churn rate. In short, here is where the path becomes complete: from the collection of data from customers, to the creation of a new, truly one-to-one and personalized dialog with them. In this way, cold data is transformed into fruitful, long-lasting relationships. The results of this campaign were impressive (see here for more on this case study).
In conclusion: the digital revolution in the insurance industry has been underway for several years now. It has changed the face of this important industry forever. But there are still many margins, many possibilities, many opportunities to be seized. The time is now!