Innovation is a trend, which is cultural even before it is technological, and which has traditionally struggled to gain traction and strength in the insurance industry. This is despite the fact that the industry’s value proposition has always been about creating dynamic products designed both to meet the changing needs of consumers and to contain the various risks that arise from new and sometimes unpredictable contexts.
However, in recent years, digital transformation has significantly accelerated insurance processes, offering companies not only new tools and strategies, but also alternative business models. the advanced use of big datahas once again placed the customer at the center of the insurance world, and the customer experienceis now one of the main levers where companies can intervene to improve business results.
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The path to get value from innovation in the insurance sector has just begun, and it is the result of the synergy between technology and the human element and the integration of processes that unleash the potential of data and those that enhance personal creativity.
To better understand the extent to which technological development and customer orientation impact the world of insurance, let’s start by providing some examples.
innovation in the insurance industry: four technological developments that support customer focus
In this interconnected world, insurance industry innovation, if you want to take advantage of the many opportunities for growth and address potentially very serious risks, you must use the technologies at your disposal. cyber insurance, iot, andconnected insurance are three of the most advanced technologies that offer solid support for insurance companies to effectively adapt to a changing environment.
The first example of technological innovation was created to curb the growing danger of external attacks on organizations’ information systems. Cyber insurance is a relatively new market that is on track to reach $22.5 billion by 2026, with an annual growth rate of more than 25%, according to IndustryArc’s 2022-2027 forecast. it’s about protecting the confidentiality, integrity, availability and authenticity of information: today’s enterprise cybersecurity strategies are designed not only to protect local data but, more importantly, to control the flow of data traveling between wireless devices and cloud servers. .
internet of things
The iot insurance market is also expected to see sustained global growth: the total value will exceed $3 million by 2026. Using digital sensors and technologies and collecting information from internet-connected devices, insurance companies can now monitor and improve their understanding of the state of risk situations, turning raw data into actionable and usable information. iot technologies applied to insurance allow to more accurately assess the risk profile associated with individual portfolios and, ultimately, improve the productivity and overall profitability of the company. furthermore, with the automation enabled by the internet of things, insurers can multiply the possibilities of connecting with customers by adding important points of contact in particularly sensitive stages, such as acquisitions and claims management.
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connected insurance is the innovative business model that is developed from the diffusion and articulation of the internet of things. it gives rise to a true ecosystem that uses iot platforms, sensors and devices to collect useful data to monitor the real behavior of users and consumers and translates this data into information that it makes available to industry players. connected insurance integrates information from a variety of sources to create useful insights to improve decisions for companies in the insurance industry. has an extremely positive effect for the insurance company as a whole, especially in terms of the process of empowering the client by allowing the development of a strong and significant digital presence in the insurance company. market through the implementation of channels that individual users can use independently. connected insurance is part of a change that is redefining the communication paradigm between insurance and policyholders.
client communication management
The revolution of small communication systems that we mentioned earlier finds one of its most advanced forms in customer communication management (ccm). ccm, which can be understood both as a strategy and as a tool, integrates a series of interactive applications that allow the creation, storage, retrieval and distribution of all communications between a company and its customers, potential customers and partners commercials, all on the same platform. specifically, a ccm:
- allows you to compose, format and personalize content by translating data acquired from various sources into electronic and physical communications
- supports the creation and production of materials used by marketing (from personalized customer messages and new product introductions to transaction documents)
- provides targeted communications through a wide range of media, including mobile devices, email, SMS, web pages, social media sites, and print media
- know the customer’s preferences regarding certain offers
- calculate the probability that the customer will remain loyal or switch to a competitor
- make reliable predictions about how the relationship may evolve in the more or less distant future
the aim of the ccm is to ensure that communications directed to different customer segments (in the case of more advanced software, even one to one) are relevant, clear and consistent, regardless of the channel or mode through which they are transmitted .
from traditional face-to-face model to digitally enabled customer centralization
To cope with the social isolation imposed by the pandemic, many insurers had to rapidly digitize the customer and agent experience, moving away, often permanently, from the traditional face-to-face service model. others provided communication channels that catered to customers who are now accustomed to greater and more meaningful interactivity. others implemented loyalty and entertainment programs with the goal of increasing engagement, investing in solutions to automatically produce innovative content, such as interactive videos and personalized mini-sites.
Corporate decision-makers, the top executives, are taking note of the key role that innovation will play in delivering long-term value. but although the industry as a whole presents different scenarios where technology is already being used to open new spaces for dialogue and improvement of relationships, there are still few companies that systematically pursue innovation. yet, ever-increasing customer expectations and the entry of fierce new competitors (it companies, insurtechs, corporations) are putting pressure on companies in the industry, driving the kind of innovation that canprovide growth that is fully integrated at all levels. of the organization.
Structuring, organizing and fostering innovation in the insurance industry is certainly a complex task. It is an ambitious goal, without a doubt, but today, thanks to digital technology, it is also an accessible goal. this is the case of all those companies that, in an attempt to put the customer at the top of their priorities and at the center of their business processes, have established and implemented digital marketing practices focused on achieving the customer centricity.
Let’s pause for a moment: what do we mean by customer-centric?
what is customer orientation?
according to the famous definition of gartner, focus on the client is nothing more than “the ability of the people of an organization to understand the situations, the perceptions and the expectations of the clients”. the individual person involved in the relationship with the brand becomes the central point of all decisions related to the delivery of products, services and experiences.
customer orientation in the insurance market: for holistic customer relationship management
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An insurance company seeking to develop true customer centricity must have access to a bird’s eye view of the customer’s situation in order to anticipate their needs. in particular, you must:
In other words, innovation in the insurance industry means using technology to deeply understand customers, distinguish them and guide them, this is what all companies are looking for today.
In order to accumulate the necessary knowledge to put the customer back at the center of the relationship with the company, today’s insurance industry players have at their disposal extremely effective tools, thanks to which they can make their data analysis even more accurate. they can use the results obtained from these analyzes to build profiles that are as accurate as possible and create products and services with a high degree of customization. This process of continuous modernization —of the infrastructure and work methodology— operationally translates into a customer experience made for each person: fluid, comprehensive, timely and efficient, capable of meet the needs of consumers. expectations and adapt perfectly to their characteristics.
To achieve a truly customer-focused experience, an organization must be able to move in several directions simultaneously: design frictionless purchase and subscription paths, offer products that are affordable relative to actual products. possibility of spending, and above all, offering a holistic management of the relationship with the client.
Interacting with each other, technological evolution and a renewed awareness of the role of the customer favor the shift to a customer-centric paradigm. This statement, which has its theoretical validity, also has —and this is the aspect that most interests us— a specific spin-off in terms of obtaining business results: the commitment to ensure that the insured gets what they want or need, when, where, in the way they want or need, goes hand in hand with the business need to build higher and higher profit margins.
Although the ease of purchase and the speed and security of transactions are an essential prerequisite for establishing contact, they are not enough, however, to create a dedicated and, to a certain extent, exclusive space for the company, where You can establish a relationship with the individual customer that is meant to last. in fact, even now, the times when customers actually interact with the insurance company are limited: buying the policy, renewing it, and requesting information. This means that most insurtechs have only two, maybe three, significant opportunities to attract and impress the customer.
To activate and nurture loyalty processes, the only ones that can ensure a long-term relationship, companies must reset the funnel. on the one hand, they mustmultiply the points of contact enabled, the channels served and the informative content and, on the other hand, they must also simplify the purchase process, which must become more interactive, fast, efficient, and easily navigable. This must happen at all stages, from the consideration phase, when the customer evaluates the most suitable products for his needs, to the decision phase and subsequent payment. and it must go further, in the post-purchase and subscription period, the true test of customer centricity strategies, where the relationship must be kept alive by enriching it with stimuli, personalized insights and exchange opportunities.
optimizing communication: this is how innovation is achieved in the insurance sector
according to mckinsey, insurance companies, whether they want to grow or consolidate the position they have acquired, need to design value propositions that are not only actuarial products and mechanisms, but also incorporate actions that are aimed at increasing customer commitment. This is where the orchestrated strategies between different business functions, especially marketing and sales, whose objective is to modernize and digitize distribution and communication platforms play a decisive role. . this means developing a more detailed profile of each segment, generating proposals based on customers’ unique needs, and customizing offers and messages.
Putting customers and technology at the center of true innovation in the insurance industry does not mean “owning” the customer relationship. instead, it means taking charge of customer problems to try to solve them in the most efficient way possible, avoiding redundancy and repetition of information, minimizing waiting times, streamlining reception operations and ensuring attentive and efficient remote service. .
Using the right mix of automated tools and content, like interactive videos and personalized websites, any business can capitalize on every interaction opportunity to build valuable relationships and transform any communication, including transactional, into decisive. moments into a truly innovative customer experience.
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