Advanced technology has been making inroads across the world for the past ten years. Cloud technology, integrated data, analytics and most recently artificial intelligence (AI), are advancing across the global insurance landscape.
Insurance companies have been slow to adopt new technology for a number of reasons; internal resistance to change, lack of budget for a large transformation project, or no pressure from consumers to change the process. However, since Millennials’ power in the economy has grown, there has been a demographic shift for insurers. The customer base has changed, with younger consumers preferring a different interaction with their insurer. In fact, a recent Celent report showed that 37% of policyholders prefer smart tech to human contact. And a further 21% are willing to test AI technology for service for the first time.
To satisfy this generation, investing in digital transformation is vital or you run the risk of losing business to new market entrants. There are a number of key areas for you to consider when investing in new technology.
Paper files have been used in claims departments for centuries. Unfortunately, they are inefficient, they are at risk of becoming lost, and are difficult to share in a large claims department. Storing all data electronically is more efficient, and allows copies of files to be easily shared inside the claims department. As advanced technology is implemented, this also allows the data to be mined to identify trends and patterns.
Allowing consumers to submit receipts and claim details electronically also speeds up the claims process. The data can be sent instantly from the claimant to the insurer at a time that suits the claimant. This also reduces the risk of the receipts being lost during transit.
Allowing policyholders, in general, to communicate with you using online means is more efficient. There are two ways of doing this; email communication directly with the policyholder, or through an online portal accessible through a mobile app or a web browser. The portal is more efficient, however, as all details can be stored in a central database. Emails may be stored locally and be deleted or misplaced.
The core issue with digital transformation is the siloes of data which exist in many insurance companies, resulting from traditional legacy systems which don’t speak to each other. Integrating multiple systems is important for the future development of claims technology. All consumer data can then be stored in one central location and can be accessed from a number of systems.
Storing all data in one central location also presents great upselling and cross-selling opportunities to your existing consumer base. Accessing the demographics of policyholders and the associated claim data allows your sales and marketing team to target prospective customers. If a customer has had a previous positive experience with your company, they will be more likely to purchase additional policies from you.
Once the basics have been implemented, advanced technology can be applied to learn from the claim data. Analyzing the data can provide your business with improved business intelligence, helping you to make more informed business decisions.
For example, analyzing the data might show that a particular demographic is more susceptible to a particular illness. To avoid these claims, you can make an informed business decision to intervene before the claim comes to fruition, as intervention often costs less than paying out a number of claims. Analytics can also improve underwriting and fraud detection, again improving the bottom line for the insurer.
Artificial Intelligence (AI) is also being applied to improve the consumer experience. AI learns from the data it is fed, so the more data the AI is fed, the better it will perform. Chatbots, which are commonly used on websites, are powered by AI. Consumers can ask questions through the text window, and the chatbot can help to answer the query.
According to a recent survey, less than 50% of millennial policyholders are satisfied with the key drivers of customer engagement. As the millennial demographic continues to expand, now is the time for insurers to consider adopting appropriate technology to meet the demands of this demographic.
We have developed a quick guide, outlining three questions you should be asking when considering a claim system upgrade.