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Like many other sectors, the insurance industry is in the midst of a transformation due to technology. Customer analytics software, drones with computer vision to assess properties, e-commerce platforms to shop for policies, and many other types of insurance-related technology — collectively known as InsurTech — are reshaping the insurance world into a more efficient, digital industry that provides a great experience for customers.
And the InsurTech market continues to grow, with more startups popping up and making their marks. Over $7 billion in global funding flowed to InsurTech companies in 2020, which was an annual record, finds Willis Towers Watson.
However, insurers do not have to necessarily compete head-on with InsurTech firms. From independent insurance agents to large insurance firms, many have been able to partner with, invest in or integrate the services of InsurTech solutions to deliver a great experience for customers and improve their own operations. In this article, we’ll explore these benefits in more detail, looking at how InsurTech is reshaping the insurance industry for the better.
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Becoming More Digital and Automated
From InsurTech companies that sell policies directly to consumers through mobile-friendly platforms, to software solutions that help manage policy renewals online, InsurTech is reshaping the insurance industry into a more digital and automated field.
Insurers benefit from being able to sell and manage policies with greater ease. Online policy quoting, for example, allows insurers to start the sales process at any time digitally, rather than needing to be available for a meeting to go over what a prospect is looking for and then crunch the numbers manually to provide quotes. Meanwhile, customers benefit from being able to shop for and manage insurance policies on their own terms, according to their preferences. If they want to submit a claim from their phone, they can; if they want to compare quotes in the middle of the night while browsing online, they can.
“At first, this technology movement was nearly invisible to consumers. Insurance companies were starting to use new technologies behind the scenes to create efficiencies that customers couldn’t see. But now, we’re seeing insurtech firsthand,” says Benefytt, an InsurTech company that focuses on areas like health insurance enrollment.
As more InsurTech solutions emerge and mature, they are reshaping the insurance industry to facilitate even more digital and automated processes, similar to how the finance industry has now made mobile and online banking everyday matters. With InsurTech, both insurers and their customers can benefit from processes/features that are reshaping the insurance industry, such as:
- Online policy comparisons: Customers can figure out the right policy for their needs at their own pace, rather than needing to involve an agent when the customer is just in the information-gathering stages.
- Mobile policy management: Customers can review their coverage and submit claims anywhere through mobile apps and sites.
- Automated answers to common policy questions: Insurers don’t have to spend as much time on recurring questions and customers can quickly get the information they’re looking for through some InsurTech tools.
- AI-enabled analysis of underwriting data: Artificial intelligence is helping insurers speed up the underwriting process so they can grow their customer base.
- Automatic renewal reminders: Insurers can improve renewal rates through tools that automatically remind customers of upcoming renewal dates and allow them to complete renewals online.
Increasing Insurers’ Efficiency
In 2020, 60% of insurers globally said they have explored investments in InsurTech, with operational efficiency being the top consideration, finds Goldman Sachs Asset Management.
While you don’t have to invest in InsurTech to benefit from it, this finding underscores how InsurTech is reshaping the insurance industry into a more streamlined, productive sector. The days of combing through mountains of paperwork, suffering from a lack of communication across departments or with customers, and generally being slow-moving, bulky business are fading away. Now, insurance agents and carriers are increasingly able to operate efficiently in areas like:
InsurTech is reshaping the insurance industry to allow customers to easily generate bindable quotes online and quickly start their policies. Instead of needing to set up a meeting and sending huge onboarding packets in the mail, insurance agents can efficiently turn a lead into a customer online and manage their policies digitally.
When customers do have to submit a claim, they want the process to be as painless as possible, as they’re already dealing with an issue that caused them to submit a claim in the first place. And insurers don’t want to be bogged down in reviewing claims details when they could be spending more time building relationships with customers and generating new leads. So, some InsurTech solutions use AI to automatically review claims information and at least cut out some of the manual work that insurers need to do to determine what’s covered and how claims can be paid out.
Analyzing customer behavior:
InsurTech solutions can also improve insurers’ efficiency regarding sales and marketing efforts. For example, some tools use data science to determine things like what types of promotional activities lead to sales and predict renewal rates. By having these insights, insurers can spend less time manually trying to assess their sales and marketing activities and can put more effort into what works for them.
Providing a Better Insurance Customer Experience
As a whole, InsurTech is reshaping the insurance industry into a more customer-friendly one. By facilitating more automated and digital processes, customers can quickly get the information they’re looking for and interact with insurers on their own terms. Some customers might still prefer more one-on-one, in-person interactions, but at least giving them the choice to choose and manage their insurance policies online can help insurance agents appeal to a wider base.
And by providing the option for a more digital experience, insurance agents may be able to future-proof their businesses. Most likely, consumers will flock increasingly to mobile and other online solutions as the broader e-commerce landscape takes hold. So being able to shop for insurance almost as easily as ordering clothes online could go a long way toward delivering a great customer experience.
“Consumers expect a simple, streamlined experience, typically enabled by smart technology, and that experience presents a wide range of opportunities for innovation within the insurance industry,” notes The Council of Insurance Agents & Brokers.
Being Available for Customers
Part of creating a great customer experience also requires being available for customers to answer their questions and quickly solve concerns. A single insurance agent can’t be available 24/7, but with InsurTech reshaping the insurance industry into a more digital one, insurance agents can leverage tools that allow for this around-the-clock coverage. With Wheelhouse, an InsurTech solution powered by Talage, insurance customers can obtain bindable quotes online at any time, for example, without needing an agent to walk them through it.
Also, as insurers increase their internal efficiency with InsurTech, they can have more time to handle more complex customer needs. For example, if an insurance agent can save time by using an InsurTech tool to handle basic policy questions, that agent could then have more time to provide customers with the more detailed attention they might be looking for when, say, considering whether adjusting their coverage is the right fit for their business.
The potential for InsurTech to reshape the insurance industry in a positive way is vast. Insurance agents and carriers can leverage a variety of tools that help them improve from an internal perspective while also being able to provide customers with the experience they’re seeking.