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DIGITAL TRANSFORMATION IN INSURANCE

The pandemic has altered how insurance conducts business. Many operations, including sales and service, have shifted to digital channels. This context of transformation has been influenced by several factors, including the need to adjust to a new generation of consumers, ongoing advancements in technology and digital innovation, the intensive use of data, the emergence of new distribution channels, and, last but not least, the new wave of digital startups.

The insurance industry is undergoing a digital transformation through the application of technical technologies like Big Data, Artificial Intelligence, and Machine Learning with the following objectives.

  • Provide a personalized customer experience
  • Optimize costs and operating times
  • Centralize access to information

Companies are becoming more aware of the effects of implementing new technologies developed for the industry.

InsurTech: What is it?

The term "InsurTech" refers to innovative technologies and new digital tools developed to optimize the performance of insurance companies, provide a better customer experience, and unlock the potential of advanced analytics. In a stricter sense, the definition of InsurTech means the combination of insurance and technology to bring revolutionary solutions to business.

According to the latest reports and statistics, the size of the global InsurTech market will continue to grow. Revenue growth will peak at $1,119.8 million by 2023. Statista cites improvements in claims processing in the US and around the world. Using new technology, insurers process claims faster and more efficiently.

The new tools and technologies changed how traditional insurers think about their development. That's why more and more insurers are embracing InsurTech to.

  • Make underwriting and actuarial decisions faster and better
  • Offer a better customer experience
  • Unlock the power of advanced analytics
  • Drive cost savings with increased operational efficiency

New technology in the insurance industry provides revolutionary solutions to fill gaps in capabilities and offerings and improve processes across the entire insurance value chain. For example, there are.

  • Predictive analytics apps for customer acquisition, risk assessment, and policy development.
  • White-label platforms that allow brokers to sell short-term insurance products through any distribution channel.
  • Artificial intelligence and data science developments for fraud detection, etc.
  • All innovations help to exchange data in a more modern and meaningful way.

Challenges of Digital transformation in insurance

The insurance sector is one of the few that has been promoting the same product for decades until lately. But as technology improves, businesses are compelled to shift toward a digital transformation that enables them to adjust their product and service offerings to the needs of the modern market.

This is how the "InsurTech" industry, which combines cutting-edge tools and technologies created for insurance firms, emerges on the market. Where Big Data (the administration of enormous amounts of data), AI, and Machine Learning are found (automatic learning of machines), each of them is crucial in this process of insurer digitalization.

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These are the eight main challenges of digital transformation for the insurance sector

  • Generate value through data
    It is essential to understand how you want to use that data in a way that creates value. Only if it is done will it be possible to determine the different uses of the data: personalize the offer, improve the experience, retain the customer, etc. For decision-making in insurance companies, the datadriven approach is crucial.
  • Customer experience
    Get to know the client better and allow him to find out what you want and if it fits your proposal. This process should occur throughout the customer lifecycle, from prospecting to leaving.
  • Ecosystem development
    You must respond to consumers' new demands by opening yourself up to other areas and new scenarios to get used to. The insured wants comprehensive solutions, leading to ecosystems and alliances with other companies.
  • Joint applications with an insurtech
    Some insurtech focus on a specific area or problem and apply technological solutions. Traditional companies have a dilemma between competing with them or collaborating by contributing to the best of their knowledge.
  • Omnichannel
    The Omnichannel or Omnichannel provides a new and improved experience for the customer. Likewise, it generates new exhaustive data that will facilitate its analysis and the personalization of the commercial relationship.
  • Margin management
    Insurance companies pursue a positive return on investment (ROI) like any business. Technology adoption is characterized as a goal to develop new business models based on it. Still, the insurance industry's digital transformation may only decrease costs or increase them if the proper decisions are taken.
  • Cybersecurity
    Companies must be vigilant about cybersecurity threats to appropriately and responsibly safeguard customer data and online platforms.
  • Accelerate digital and cultural transformation
    One of the most critical challenges for insurers will undoubtedly be to adapt and reinvent themselves in the new digital environment, placing the customer at the center and taking advantage of digital innovation.

For this, it is essential to maintain the digital mindset (literally, "digital mentality") throughout the organization, thus providing a global approach to digitization programs and keeping the entire organization accountable for change.

All stages of the process are impacted by the insurance industry's digital transformation, which also contributes to creating new products and services. This enables effective omnichannel to enhance the quality of the external (insured) and internal (agents and brokers) customer experience. It provides both an agile response to the requirements and a more direct, efficient experience.

Benefits of digital transformation in the insurance industry

What are the benefits that insurance companies obtain from undertaking digital transformation?

  • Reduce administrative times: New technology simplifies management for the customer and the business. The ability to immediately quote and purchase insurance online, communicate with an online advisor or deliver the necessary paperwork for policy collection through an app.
  • Increase in income: thanks to improved collection procedures and the automation of commercial duties.
  • Improve customer experience and satisfaction: The application of technology results in more precise and agile processes, which help the customer understand the processes by making them more transparent. Eliminating the piles of papers to sign, where the fine print always made him doubt. Above all, it gives you the peace of mind that your insurance company listens to and responds to you (even if it sounds obvious).
  • Save operating costs: Human resources are optimized by implementing artificial intelligence and automating and digitizing processes. They can be work hours from our team and resources of another type, for example, paper-to-print policies or communications by physical mail.
  • Facilitate access to information for the entire chain: Both company members and customers will have access to relevant and updated information.

We know that many companies today face digital transformation as a huge challenge.

The impact of the Internet of Things (IoT) on the digital transformation of the insurance sector

The term "Internet of Things" (IoT) describes the Internet connectivity of commonplace items. This idea has recently gained significant relevance for the insurance industry, as the adoption of digital transformation can enable the provision of more individualized services.

Here, we describe the cases of two insurance types that have drastically changed as a result of the use of new technologies.

  1. Telematics: The digital transformation in auto insurance
    People like paying less for a service. For this reason, many businesses are integrating telematics into their vehicle insurance programs. These gadgets continuously produce and send information about the car's speed, trip routes, and geolocation. Doing this gives the insured the option to modify the coverage price to account for usage and driving patterns. For individuals who don't use the automobile or are "responsible drivers," this translates into a lower insurance cost.
    With this advancement, insurers may now give a price based on the client's actual conduct rather than expected behavior, as was the case in the past.
  2. Geolocation: The digital transformation in the agricultural insurance
    Other insurances that have benefited from the new technologies are the agricultural ones. Years ago, this type of coverage was defined based on historical statistical data and by area. However, with the advent of climate change, these data are no longer entirely reliable, and with the appearance of "InsurTech," the risk calculation can be tailored to the client.
    In this case, for example, by checking information with the National Meteorological Service, the company can know in real-time if an insured field is being affected by rain or hail. Meanwhile, with GPS technology, there is precise information on the location of the insured property. This, combined with historical data, allows for a more personalized risk assessment and thus offers more appropriate coverage to the insured.
    Now, in this digitalization process, Big Data plays a primary role. Since each device and interaction constantly generates information to be helpful, the data must be ordered and easily located.
    The key is to have a solution designed for the Insurance industry that, above all, is tailored to the needs of the company. That allows us to manage the data centrally, automate documentation issuance, and, most importantly, offer two-way communication to the client. Regardless of the channel you use to communicate, our insured's experience must always be the same: an agile and efficient response.

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Conclusion

The pandemic has prompted us to rapidly progress in adopting a digital way of working and living. In the case of the insurance industry, many were forced to make these changes to continue operating during the pandemic. It is time for insurers to adopt this new way of working to boost their operations, thus benefiting both customers and the company itself.

After all, technology is the vector of development, a strategic tool that will allow us to undertake the long-awaited transformation of the insurance sector. The opportunities that will satisfy the customer and put him at the center of the process.

The ability to adapt to change is crucial for insurers to succeed in the digital economy. Our engineering expertise enables players across the insurance industry to grow and compete efficiently through the use of the software. We offer a range of services, including fast innovation and prototyping, agile software development, and managed and enterprise services. We utilize a variety of tools and technologies to tackle the most challenging business problems.

Our goal is to help you extract the most value from technology by increasing sales, managing risk more effectively, and reducing costs, while still placing a strong emphasis on your most valuable asset: your customers.

What we do

We work with clients across hundreds of use cases to create technology solutions that enable the 5 nodes of Industry 4.0.

Enhancing the Core

  • Enterprise architecture
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Unleashing the Power of Data

  • Big data management
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  • AI/ML technologies (machine vision, OCR, NLP, speech, CUI/chatbots, etc.)

Crafting Exceptional User Experiences

  • User experience and design
  • Omnichannel customer experience and marketing
  • IoT and AR/VR integration

Streamlining Operations

  • Customer communication management (CCM)
  • Customer relationship management (CRM)
  • ERP systems
  • Intelligent process automation (RPA, BPM, ECM, etc.)

Optimizing Internal IT

  • Accelerated quality and testing engineering
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IT Operations and DevOps

Determine the optimal platform for CI/CD to optimize development and production processes across different projects. Ensure faster delivery of high-quality software.

We offer UX/UI Design Services. Our team of designers creates user-centered designs to enhance user experience and drive engagement. From website and mobile apps to software interfaces, we bring your digital products to life with intuitive and aesthetically pleasing designs. Our services include,

Loyalty Transformation - Emotional and Intelligent Engagement

By tapping the right signals from sales, experience, and marketing channels, we help you unlock the untapped potential of loyalty transformation. Our digital solutions team works with multiple SaaS, PaaS, and cloud solution providers to help you ideate, design, plan, and execute new loyalty solutions driven by a proven loyalty-transformation framework. Rejolut's team of experienced designers, data engineers, integration specialists, and loyalty functional SMEs can help expedite your transformation journey by building loyalty.

User Flows

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Wireframes

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