Digital transformation in insurance puts the customer first

Both insurers and policyholders stand to benefit

Digital transformation in insurance puts the customer first



by Gijsbert Cox, Industry Leader, Insurance, Appian

From enabling customer self-service for your policies and claims, using wearable data to create personalised policies based on the number of steps a customer averages per day, to new on-demand products making coverage more accessible – digital transformation promises to breathe new life into the insurance industry, to the benefit of policyholders and insurance providers alike.

Given that most insurers have accumulated decades-worth of customer data, they’re in a great position to provide personalised bespoke products based on each individual’s lifestyle. But the industry isn’t exactly known as early-adopters. Many companies still rely on old green screen legacy systems that are at odds with modern digital transformation strategies and modern, intuitive user interfaces that work on multiple devices. Furthermore, data from multiple systems are often scattered across departmental, functional or even business siloes, making it impossible to leverage information effectively for better customer insights.

Rip and replace initiatives often take months or years, and are expensive, disruptive and fraught with risk. Many of these projects have failed in the past, often resulting in fear for large IT change projects. But insurers needn’t take an all-or-nothing approach. Incremental changes to legacy systems using software and automation between existing systems and business units can help companies overcome barriers to digital transformation.

Building relationships that last
Insurance is a slow-moving product and new insurance customers are expensive to acquire. A lot of money is spent on advertising and product distribution. Hence a renewed focus on retaining existing policyholders by deepening relationships through enhanced experiences and personalisation, can be an effective tactic and a key competitive differentiator.

Customers aren’t looking for reasons to interact with their insurance provider. At a time when it has never been easier for customers to shop around and switch providers, reaching customers with relevant information and offers, at exactly the right moment, can make the difference between them walking away or renewing their policy. Think about being available and offering services at life changing events for the customer, like moving house, changing jobs, the birth of children or retiring. Data can make that possible, but not if it’s tied up in individual business systems and siloes, cut off from the rest of the organisation.

Using digital-first, cloud-based platforms, insurance companies can unify data from across their business, painting a complete picture of a policyholder’s profile, their products, history and any unique circumstances to identify unmet needs, anticipate future needs and deliver a more seamless and personalised customer service. And unlike the traditional model of replacing one core system with another, they can accomplish these objectives fast.

Leading multinational insurance company Aviva did exactly that. Over the last 320 years, Aviva has acquired 750 other companies, along with their systems and data. For call centre agents with a customer waiting at the other end of the phone, that meant sifting through legacy systems to try and find the right data. By using the Appian Low-Code Automation Platform in the cloud, they were able to unify 22 separate systems on one platform, giving customer service operators a 360-degree view of their customers and enabling them to act quickly.

According to research by EY, 40% of consumers decide to continue their relationship with insurers based on the quality of their experience, which means providing this seamless and personalised experience is crucial for retaining customers.

Innovating new experiences
Most customers have already come to expect digital and mobile interactions and, as a result, insurers are now striving to differentiate themselves in a crowded marketplace with products and experiences that people actually want.

The rise of disruptive insurtech companies that are technology-led from the get-go is pushing traditional insurance companies – typically cautious by nature – to quickly pivot. This competition is proving to be a catalyst to innovation.

Imagine risk assessments informed on the data collected from sensors embedded in walls, tracking air quality or chemical exposure. Or if an insurer could detect a leaky tap and automatically shut off the water before the homeowner comes home to a flooded kitchen.

Connecting disparate data sets through automation software can be the jumping off point for creating more personalised policies tailored to the individual. And these flexible, on-demand offerings promise to make coverage more accessible to those who have been previously been uninterested in, or unable to afford, traditional policies.

Improving the insurance purchase process
While underwriters have been the backbone of the insurance industry for centuries, many people have warned the role will become obsolete if risk assessment is automated. But while the job will certainly change, digital transformation will reinvigorate and evolve the role that has remained largely unchanged for decades.

The ability to access and analyse vast quantities of customer data from a range of sources – from wearable devices to social media – will allow underwriters to become more efficient and effective, being able to make better informed decisions faster. Slow, manual processes will be streamlined, with less time spent in volleys with brokers and agents.

Making use of digital cloud-based data analytics platforms will enable underwriters to expand into new markets and increase the number of policies sold while preserving profitability. It could even mark a shift from simply assessing risk based on past experience and paying out claims to using real-time data to help customers to manage their risk, bringing greater value to customers.

Change isn’t optional
Change isn’t optional – in order to survive, it is imperative. To come out on top against disruptive competition and changing customer demands, traditional insurance companies will need to think like start-ups. That means evolving quickly and leveraging new technologies and data analytics to create new, personalised customer experiences.

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