From dematerialization to personalization. From IoT to Machine Learning. From Virtual Reality to gamification…and more. Here are the top 10 digital trends for insurance.
The insurance sector is one of the most important and diverse productive sectors of the world economic system. It’s a strategic sector, one that has many points of contact with the public and with individual health, a side that, as is evident, has jumped to the center of public debate, especially given the difficulties facing many parts of the world in the wake of the pandemic. But that’s not all. We are talking about a sector that has seen its processes and dynamics radically evolve in a relatively short time.
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The insurance industry has experienced a real revolution, triggered by two main thrusts:
- Digital Transformation, which has changed the face of all sectors, but also of society as a whole (the Insurance Industry is no exception);
- a general and marked trend towards market liberalization, with the emergence of new players (of different sizes), and an unprecedented amount of choice available to users. All of this, as a consequence, has brought a paradigm shift. Today, the insured has become the real center of business. It is a business that becomes more and more personalized.
Essentially, we are talking about digitization and personalization.
But the most important thing to keep in mind is that these two factors are continuous. They are two drivers that are producing constant innovation in the dynamics of this sector. That is why, today more than ever before, it is necessary to keep an eye on the future, constantly, to discover the new digital trends for insurance before the competition. To give you a hand, we have collected 10 of the most promising trends that insurance companies will be facing in the coming year.
1. Digital document management
Digital Transformation in the insurance sector starts with document management. In this field, the keyword is dematerialization. The objective is the total elimination of paper documents: an operation to be carried out according to the most up-to-date legislation.
- Savings of time and costs. Increased security. Reduced compilation errors.
- Enormous simplicity and speed in sharing documents (whole or partial). Optimized search operations (upstream, however, effective indexing is needed).
- Above all, the ability to extract a huge amount of precious data from your archives, which becomes fundamental for redesigning your digital Customer Relationship Management processes.
On the topic of dematerialization and digital document management we have dedicated an entire post, which you can see here.
2. A modern IT architecture
This point is intimately linked to the previous one. Think about the complexity and number of documents produced by insurance companies: contracts of various types, attachments, forms, different types of policies. Then there is the aspect that concerns the direct (or indirect) relationship with customers. Finally, don’t forget about all of the work interfaces for employees and collaborators. The list could go on.
This is why, in this sector, it is more decisive than ever to invest in innovation for IT architecture. And what is the pillar on which to design it? Cloud Computing.
Why? Again: cost savings (for the purchase of hardware, software, servers, data center). But above all, the benefits are soaring efficiency, great elasticity, and scalability. Exponential increase of cyber-security.
3. The growth of aaS
In the above point we introduced the importance of elasticity and scalability. It is important to emphasize that these are not only issues that concern IT architecture.
One of the biggest trends in the Insurance Industry is that of the so-called aaS, or “as a Service”. We are talking about an ever-growing slice of tailored, short- or very short-term insurance that needs to be activated quickly. In the future, therefore, we will have more and more usage-based policies that can be activated quickly and easily, often through dedicated apps.
Think, for example, about insurance related to travel, sports events, or for specific health needs.
4. The turning point of IoT
One of the most promising digital trends for insurance is certainly that of IoT, the Internet of Things, which is the connection applied to everyday objects.
Some examples of IoTs applied to the insurance industry?
Wearable devices that are being developed in the healthcare industry (resulting in reduced risk). Or car components (which will certainly change the dynamics of automobile policies). Also everything related to the home and manufacturing 4.0.
On this front, the margins for development are enormous. And one thing must be immediately emphasized: IoT also means (and above all) a new huge amount of data that companies can collect and analyze. This brings us to the next point.
5. More and more data-driven
The engine of the digital revolution is data, the so-called “Big Data.” This is a widely known fact.
What is important to underline is that, in the insurance sector, this enormous amount of information is fundamental in two directions:
- Internal: Keeping the functioning of processes under control, down to the smallest detail, in order to reach the maximum degree of optimization;
- External: In this case, which is even more decisive, it is a matter of collecting as much data as possible on the audience of customers, both actual and potential. Learn how to analyze and interpret the data correctly, with the help – now indispensable – of AI and Machine Learning systems (and we will return to this in the next point).
Segment your audience into increasingly specific and functional targets. Finally, hit these targets with increasingly tailored Marketing and Customer Service operations. This is what we mean when we talk about data-driven optics.
The final objective? The personalization, which we will talk about in point 7.
6. AI and Machine Learning
Data, data, data! Huge amounts of data are at the basis of all new digital trends for insurance: from process optimization, to strategic choices, to marketing. It is natural, therefore, that manual processes are no longer sufficient to collect all this information, integrate it, cross-reference it, and then interpret it. Here, then, automatic systems, based on AI (Artificial Intelligence) and Machine Learning, come to our aid.
Important: these systems must be calibrated according to the characteristics of your business, your needs, and your objectives. Above all: they must be dynamic and constantly updated.
To give you an idea of how important this market is for the insurance industry, just think of these figures: in 2017, the Insurance industry analytics market was worth $6.06 billion. Forecasts for 2023 are projected to reach $11.96 billion, with a compound annual growth rate (CAGR) of 12.5% (marketsandmarkets.com).
7. The future is personalization
What is beyond the data-driven, and beyond the subdivision of your audience into specific micro-targets? It’s very simple: individuals.
The real goal of all companies in the insurance industry is the most ambitious one: to learn how to address individuals, to establish a one-to-one, dynamic and interactive dialog with their customers. From here passes the road of loyalty, which is the true goal of every insurance company.
Companies like Doxee can help you with these processes, starting from document digitization services, up to the creation of CRM and CCM departments based on personalization.
An example? The joint venture between the French insurance giant, AXA, and Montepaschi. This insurance giant has chosen to rely on the services offered by Doxee to produce personalized and interactive videos, to be sent via email to its customers, with the aim of lowering the churn rate and boosting loyalty. All with excellent results (see here).
Marketing and Customer Service experts in the insurance world have their eyes on a strategy that is proving increasingly interesting and promising: gamification. It is a matter of applying the typical dynamics of gaming (such as obtaining prizes, subdivision into levels, bonuses, and much more) to the digital Customer Experience.
The results in terms of engagement and, consequently, loyalty are often very surprising. Here is an Italian example, in this regard.
Vittoria Assicurazioni created the “Vittoriadi,” a digital game, which was active from November 2018 to May 2019. The results? A 57% annual increase in customers who registered to join the company’s loyalty program.
9. Virtual Reality and Augmented Reality
A recent Accenture survey of 623 top managers in the insurance industry found that:
- for 85% of respondents, Virtual or Augmented Reality systems are important for reducing the “physical distance” with customers, but also with employees;
- 84% of respondents said that it is very important for their company to be pioneers in the field of Virtual Experience.
This data is very clear, and it indicates that the future of marketing and Customer Experience of the sector can come from VR (Virtual Reality) and AR (Augmented Reality) systems… especially when these systems add personalization.
10. DLT and Blockchain
Now let’s return to a topic that concerns the infrastructure. Here, one of the keywords for the future is disintermediation. Here, “Distributed Ledger Technologies”, or DLT, are important. Without getting too technical, DLTs are systems based on a distributed registry of data.
Among these technologies is Blockchain, a distributed registry of transactions that does not require a central validation body. It is a technology that has gotten a lot of attention, with the creation of the first cryptocurrency, from Bitcoin onwards, and it’s showing applications with promising potential for many sectors, including for insurance.
Lloyd’s of London, for example, has recently acquired BellMead Tech, a start-up focused on claims management through blockchain.
In conclusion: there are no infallible predictions about the future. But what we are certain of is that companies that do not know (or do not want) to look ahead are condemned to stay at the starting line. And this applies to all businesses, and at all times!
Discover the opportunities of Digital Disruption for the insurance industry in this free ebook!