As many as 68% buyers want to purchase insurance services online, however, only a staggering 35% insurers are equipped to process a digital sale for the same. The evolving landscape of insurance services is compelling providers to go beyond the ordinary and deliver more value with every transaction. The ongoing Digital Transformation in insurance has revolutionized operations across the insurance spectrum by moving away from paper to digital, beyond email and into the territory of text, chat and customized mobile applications. However, traditional players often need help to embrace this disruption due to resistance from various stakeholders. This lack of acceptability to adopt digital strategies can be overcome by embracing and not fearing change.
With this blog, we intend to dive deep into the gamut of digitally driven transformation for the insurance sector- understanding digital transformation, its challenges, the resistance faced, and the ways to handle it. An effective Digital Transformation strategy for insurance has to account for all challenges and create a comprehensive solution to overcome the limitations of the traditional insurance systems while enabling a holistic change that encompasses people and processes. Digitization for the sector is primarily comprised of the following tech advancements:
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Data Analytics
Insurance is a data-rich sector. Driving technology to capture, process, and channelize data can significantly impact productivity for the Insures, allowing them to capitalize on patterns, forecast demand accurately, and offer tailor-made solutions for customers
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IoT solutions
IoT-run devices aid in deploying better fraud detection models with IoT sensors besides streamlining everyday operations with custom IoT development services
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Telematics
Applicable for more than one insurance type, these enable access to real-time data for tracking patterns and routines, making it easy to calculate premiums based on usage
Intelligent Automation
Reducing human touchpoints and taking control of mundane, repetitive tasks, Intelligent automation deploys machine learning and robotic process automation to minimize effort, risk and error
Offering customer interaction through omnichannel platforms enables insurers to deliver seamless and integrated experiences to their customers, resulting in increased customer satisfaction.
What Makes Digital Adoption Challenging for Insurance Companies?
While the shifting paradigms in insurance promise enhanced efficiency and growth in the future, these are flanked by a set of critical challenges that create resistance within the companies, making them opposed to a digital transformation. Unlike several other industry segments that have already acquired digital maturity, the insurance sector still lacks behind, owing to multiple factors:
Business Models
Most insurance companies procrastinate digital adoption owing to existing business models that require an overhaul to make it flexible and align it with digitization goals
Scattered Data
Volumes of unfiltered and scattered data remain unutilized in the insurance sector, making it cumbersome for them to transform with the existing data management approach digitally
Individual Fear and Uncertainty
While insurance companies stand to benefit from digitization, the employees often fear its impact on their jobs, skill set and tenure, which leads them to resist any change
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Financial Burden
Insurance needs help to monetarily support a digital transformation strategy as a sector with limited budgets. Introducing new technologies, upskilling employees and re-establishing processes are cost-intensive actions and a lack of funds can be an obstacle for an Insurer to attain digital transformation
Navigating the challenges of insurance transformation requires a holistic approach and a long-term vision. The insurance companies should get a digital adoption partner on board and an experienced change management team that can help the organization embrace and adapt to change seamlessly. As insurance companies fast forward into the digital realm, the ability to adapt and innovate will define success for them.
Embracing Digital Transformation in Insurance by Overcoming Resistance
Navigating the process to drive change through digitization can be challenging, given the multiple external and internal factors that impede its pace. However, overcoming resistance to digital transformation is necessary. Companies can address any resistance by:
Identifying the source of resistance
A holistic change management assessment, including surveys and focused group discussions, can identify the source/s of resistance to change. This can give timely insights into the problem besides allowing the development of problem-specific strategies
Communication and Transparency
Timely and honest communication is vital to drive any change. Sharing the broader vision around digitization and its long-term benefit with the employees is the first step towards becoming digitally mature. Communication with employees and stakeholders stands to benefit the process by allowing them time to understand the change, embrace its impact, and let go of any fear or uncertainty
Enhanced Engagement and Participation
Empowering the employees by making them a part of the process is a great way to encourage them to understand the change better. This can be achieved through interactive sessions, workshops and training, allowing employees to develop a sense of ownership
Right Expectation Setting
The gamut of change is vast during digital enablement; hence, it is crucial to communicate the change and its nuances to the employees. Share the Dos and Don’ts for the implementation process and set clear expectations for everyone involved and impacted
Incentivise and Reward
Rewarding the ace performers can motivate the teams while instilling encouragement to adapt and perform better. Success stories and best practices can be shared across teams and groups for better involvement and increased employee participation
Steering Operational Efficiency and Enhanced Services with AI: A WNS Case Study
Insurers often need help overhauling their claims management system due to the size of the data and related complexities. When Zurich (a multinational Insurer) approached WNS with the intent to transform its claims processing digitally, WNS leveraged its domain expertise to develop a customized AI solution that was more streamlined and efficient.
The entire claims system was restructured, using, in part, an AI platform that helped assess liability. By creating detailed categories for claims and creating dedicated teams to handle different claim types, the queries were now resolved quickly. The solution also included voice bots and self-service channels to improve user experience.
The changes in workflow quadrupled the speed of the liability decision-making system, resulting in higher employee and customer satisfaction scores. As stated by Zurich, WNS played a significant role in driving the partnership's success, leading to tangible business outcomes and confidence in WNS to do more for Zurich.
Creating Impact with Digital Transformation in Insurance
Digital maturity has evolved how the insurance industry operates by automating repetitive tasks and offering value-added services at different stages and processes. Timely processing entails swift decisions, adding to the consumer experience through digital interaction mediums like chatbots, customer service, online dashboards, etc. From paying bills to reviewing the claims and viewing the policy details, digital technology enables personalization at all levels.
Creating a sustainable and agile model that can withstand future competition, digital adoption is essentially ‘future-proofing’ the insurance industry. The stealthy foundation laid with AI, blockchain data, ML, and predictive analysis has brought about digital disruption in the insurance market.
The Internet of all Things (IoT) is creating a paradigm shift in insurance as the industry moves from the traditional risk protection role to a well-defined risk prevention role. Powered by cognitive technologies, hybrid cloud, and usage-based insurance services, the sector has quickly adapted to technological change in insurance with a broader vision to scale and reshape the future.