How Technology is Transforming the Insurance Sector

Usually, the Insurance industry is not considered to be technology driven as it deals with the financial aspects and tangible assets. If one wants to check the status of an insurance claim, then due to lack of online presence, a person has to do several calls or emails or have to visit the office or agent to know the status. And looking at the current scenario of global pandemic, most of the works are being done online on phone or any other digital device. Thus, if some of the segments are not available on the web platform then customers choose the one with an online presence and this is one of the instances of how the Insurance firms lose their customers. Hence it is necessary for the Insurance industry to hire custom healthcare software development companieswho can design as per the requirement.

The more the insurance companies will be familiar with the technology adaptation, the more they will be closer to their mission of being customer oriented, flexibility in doing business and quick responsive to the customer’s expectations. Almost 61% of the total customers, nowadays, prefer to check the status of their application through a digital device rather than going for a conventional way. And this is possible only through the respective software, thus, it is very important to Custom Software Development Services India so that it fulfills all the requirements of the users, which will ultimately help in retaining the consumers as well.

Innovation is considered to be the fuel of innovation and the same applies for the Insurance sector as well. In order to be more and more customer friendly, they are exposing themselves to different kinds of technologies. Also, the connectivity between the Insurance companies and policyholders are increasing rapidly. As per a study by BCG, 50% of the people have interacted for less than one time in the whole year with their insurance agency and less than 60% of those who interacted, were very satisfied with the work of the Insurer. Insuretech helps the industry to develop a future outlook and also helps in the strategic decision-making process.                                          

Insuretech seems to widen its scope by making itself familiar to such areas which have great scope of business and growth and high inertia as well as full potential to make the improvements in the fastest possible way.

If we look at the nature of the insurance industry, there is huge scope and possibilities after one understands the value offered by the upgrading technology along with the data analytics. Hence, why should the Insurance industry should not become a part of the same and evolve themselves as the industry technology.

When one makes a partnership with any of the Insuretech components for the complete value chain which helps them to connect with the nearby surroundings and then respond accordingly. It ultimately helps the insurer to provide customer-centric solutions.

Apart from the technical upgradation and operational efficiency, the incumbent should very well understand the existing organizational and cultural differences which needs to be worked upon thoroughly in order to reach an equilibrium which ensures the good performance of the industry in the future technological and virtual state.

By integrating with the technology, the insurance industry has already started reaping the benefits by isolating the sales processes, distribution channels and the policy which is looking after the claim management.

The market champions have found different ways in which the potential risk can be identified which is very important in the Insurance industry. These are mentioned below:

1)What kind of life is one living, what is the environment inside and in our surroundings-The type of information will likely be provided by IoT (Internet of Things) in near future.

2)The wearable devices which monitor different parameters of our health will help in making the decisions and what impact it would have in our life.

3)The speed of an automobile, acceleration and overall if the driving is being done safely or not, this will be analyzed by the Telematics monitors which will categorize one’s driving in high risk-medium risk-low risk.

Integrating successfully with the Insurtechs:

It is always good when any insurer wants to have partnership with the insurtechs as this not just eases but also fastens the process of digital development. Now, if one wants the partnership to work successfully, then apart from the organizational challenges, it is always suggested to study the competitive analysis which constrains the Insurers to deliver on time.

Depending on the current strategy as per digital world and an ability to react to the changes from both the side, be it users and competitors, the Insurers are divided in below categories:

1)Hyper speed Insurtechs

Basically, most of the insurtechs are startups and thus, have a flat organization structure with a very clear goal and fast decision-making process. Thus, all the required elements adapt very quickly and in a super effective manner to the recent changes in the market. As the hierarchy is not a problem here thus the decision-making process is really quick.

Here most of the Insurtechs operate as per the agile principles.

2)Medium Speed-Innovative incumbents

There are many incumbent units who are pursuing the new and innovative strategies by making a separate in-house disruption unit. They go for integration which means that they imply the new strategies and innovations in the existing processes of the business or the existing production lines. And due to this the overall time consumed in the process of integration is quite high as the new system should gel well with the legacies.

One has to make sure that the new changes are in full alignment with the existing governance structures and processes.

3)Slow Speed-Incumbents laggards

These are the one who adopt new and innovative technologies and are even capable of implementing them, but the overall process of adaptability is really slow. And this is the category in which most of the insurers fall. They do not want to take any sort of risk and rely only on the techniques which are well tested or already executed somewhere.

They believe in the evolution strategy and that too at a slow pace wherein the existing system is not disturbed very much, and the new system also comes in place but slowly and gradually.

Thus, these are adaptive to new technologies, but their speed is comparatively very slow and considered sluggish in comparison to others.

Major Factors on which the adaptability of the Insurer depends:

There are some important parameters which decide the speed of adaptability of the Insurers. These factors are noted below:

1)Ease of making changes in the internal processes

It refers to the comfort and easiness in making alterations in the internal processes of the company like services for claim, approval processes One important aspect is to provide a fast forward service to the customer and that too with complete sincerity and commitment. This is quite easy for the startups as they are very quick in adapting the changes and they have not yet fixed their own processes.

2)Product Development agility

If there are any changes in the product then it can be operated in the same way as the change in processes but any difference in product and service can be integrated in comparatively less effort

3)Agility in organization

It refers to the insurer’s ability to react to the internal as well as external changes which shows how fast the organization will sink in the changes and implement them.

4)Digital flexibility

It refers to the situation which defines how prepared the IT team is to adapt to the new changes, especially the customers who are directly facing the IT system of the insurer.

5)Cutting the edge talent-pool

The competent people are the key factors of technological advancement as if they would not have come together no technical progress would have been there.

6)Insurer’s level of innovation

It is one of the prime factors as if the insurer themselves will not be willing for any change, then it cannot happen at all and they will work in the same conventional way. Thus, the insurer should have an energetic team who is ready to face the changes that would accompany the innovation in the strategies.

Conclusion:

Insurtechs play a very important role in the transformation of the Insurance industry from conventional way to digital and virtual version. While the changes are being implemented in the organization, it is very important to keep the work culture, processes details and inter dependencies of the department in consideration.

Just working in partnership does not allow you to sit back and relax but one has to look at what challenges the organization is facing and how it can be resolved. Consequently, this will then lead to a win-win situation.

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