New fuel for the adoption of self-service insurance solutions

As the insurance industry ushers in the Insurtech 2.0 era, carriers must build an agile business landscape rooted in innovation.

Insurance companies are now tasked with maximizing the benefits of digital tools while maintaining personal engagement with customers at critical moments. (Credit: KHUNKORN/Adobe Stock)

The insurance industry has seen a shift in customer preference toward self-service portals due to the rapid rise of tech-savvy customers. In fact, claims handled virtually by mobile apps and digitally through automated processing increased from single digits to 55% over the last few years.

The evolving trend challenges insurance companies to maximize the benefits of digital tools while maintaining personal engagement with customers at critical moments. From the perspective of insurance agents, digital tools also support their workflows and augment their capabilities to build improved customer experiences.

As the industry ushers in the era of Insurtech 2.0 — a journey propelled by digital experiences — insurers can address customers’ expectations by building a robust digital system, leveraging cutting-edge capabilities from ecosystem partners, and optimizing their distribution channels to better serve customers.

Invest in digital platforms

Incorporating digital platforms into insurers’ operations allows customers to purchase, renew and manage their policies online, resulting in greater accessibility and convenience. This is the experience that the millennial and Gen Z demographics are demanding from insurers; it’s simplified, seamless and user-friendly. With 95% owning mobile devices, Gen Z are digital natives, and their tech-savviness reflects the way they engage with insurers or purchase policies.

On the backend of these platforms, low-code and no-code solutions are driving the delivery of digital applications quickly for insurers with a templated approach to allow different levels of customization. For example, companies can drag and drop the functionality they need to build specific platforms to address various needs.

Partner with insurtech ecosystem innovators

The insurance sector has experienced a significant disruption from insurtech ecosystem partners, incorporating their nimble and innovative digital-first solutions into core systems to cater to evolving customer needs.

For example, the data analytics capabilities insurtech platforms provide allow insurers to easily access, integrate and analyze data across different lines of business. Geospatial data enables precise risk assessment and management for properties; and radar and satellite data unlocks actionable insights and facilitates enhanced emergency management and decision making.

Another example is the growing application of embedded insurance. With the booming gig economy, some companies offer insurance to drivers through food delivery apps to meet their customers where they are. The use case touches consumers’ daily lives. In fact, in five years, more than 30% of all insurance transactions will likely occur within embedded channels.

By forming mutually beneficial partnerships with insurtech startups, insurers can unlock new growth opportunities while enhancing their customers’ experience.

Augment existing distribution channels with digital tools

Insurers can enhance their existing distribution channels through the implementation of digital tools, empowering agents and brokers to deliver significantly improved customer service. One such tool is the ability to quote and bind policies online, enabling insurers to maintain their efficiency while adapting to the self-service paradigm.

Digital tools help facilitate streamlined communication between agents, brokers and customers, improving the customer experience and potentially increasing customer retention rates. Insurers that equip their intermediaries with digital tools are better prepared to maintain their competitive advantage in the market.

Looking ahead

The transition to digital self-service doesn’t mean older generations of consumers will be left behind. Insurers must provide customer education and support to assist customers in navigating this new digital self-service paradigm, and best position staff to support those who require a conversation with an expert.

As digital transformation continues and emerging technology like generative AI becomes more mature and widely adopted, insurers have a role to play in building an agile insurance landscape rooted in innovation. Digital tools amplify the human element of insurance by understanding policyholders unique needs and providing tailored coverage, building an experience that is simplified and driven by an empathetic approach.

Nick Lien is senior vice president of Product and Experience at Duck Creek Technologies.

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