Revolutionizing insurance: Three insurtech trends ushering in a new era of disruption
Many insurance companies are sitting on valuable treasure troves of data that, with the right utilization and attention, could prove to be extremely beneficial. In this industry landscape, it is easy to identify those who have made use of their resources (the ‘haves’) versus those yet to capitalize on them (‘have-nots’).
While some businesses have become data-driven, utilizing it as an important asset and integrating it into their culture, other organizations are still missing out. Instead of taking advantage of the immense potential that comes with leveraging data properly, they simply have isolated pockets of ‘goodness’ that don’t benefit them in any significant way. If they continue to ignore this crucial element, they risk being left behind by their competitors who recognize the power and importance of using data strategically.
Certain larger personal lines insurers are in the lead due to their one-to-one connection with customers and commitment to providing a highly personalized experience. On the other hand, there are those general insurers trying to offer both commercial and individual services who remain behind because of siloed legacy systems that accumulate data but do nothing tangible with it. To craft effective solutions, they must break free from these outdated methods, embrace change, and use their data strategically.
As the market rapidly divides into opposing camps, we can anticipate that certain data trends will have a pronounced effect this year. What exactly do these trends promise to be?
#1 – Effects of disruptive innovation
This year, we can anticipate what the entrance of innovative disruptors to the market will encourage insurers to do.
The launch of Amazon’s insurance store at the tail-end of last year serves as an unambiguous warning to long-standing figures in the insurance industry – a potential disruption force has entered, and incumbent providers must stay abreast with digital transformation or face losing out.
What strategies can traditional insurers use to stay competitive? Crafting a policy that outlines how they could challenge and nullify the risks posed by new players is advisable. Enhancing customer intimacy, providing greater personalization services, as well as diversifying product offerings are crucial to achieving success. Amazon’s approach has always been to prioritize people before entering the insurance sector which may be what gives them an edge over their competitors.
Established companies should take Amazon’s success as an impetus to discard their outdated infrastructure in favor of more data-driven approaches. In other words, identify the antiquated systems that are creating bottlenecks due to data siloes and then upgrade them immediately. By taking this action, these firms will be able to move far faster to stay competitive.
As a non-insurance entity (known for its remarkable client service) entering the fourth biggest insurance market on the planet, it’s time to be wary of those who have yet to embark on their digital transformation.
#2 – Could 2023 be the definitive year for technological revolution?
For too long, the insurance industry has been discussing digital transformation without taking tangible steps. However, 2023 must be the year when companies act and transition to a more digitized approach.
Going digital isn’t only about the technical integration of technology, but also a cultural revolution toward its acceptance. While this means integrating technological advancements wherever they can augment potential, it is essential to avoid using tech simply for the sake of using tech.
Despite the advancements in technology, many companies in the insurance sector remain behind. To illustrate this reluctance to adapt, imagine introducing iPads into a firm – workers will still gravitate towards pen and paper for taking notes. The shift to digital transformation needs to be treated as an encompassing cultural change that affects all aspects of the organization. It is absolutely essential for firms to recognize this and manage it accordingly with thoroughness and care.
#3 – Automation and Robotic Process Automation (RPA) – is this the year that we embrace it?
This year has presented significant financial constraints, and companies may have to revive their interest in automation. Robotic Process Automation (RPA) was a widely discussed concept some years ago, but why hasn’t there been any progress since then?
Companies must be agile, adaptable, and able to adjust swiftly to the ever-evolving market conditions. However, before they can automate processes efficiently with RPA technology, organizations need full control of their data. The know-how is accessible, yet many businesses are not plunging into it due to a lack of proper data governance that acts as an impediment to growth and productivity by forcing workers to stick with manual labor instead of doing the tasks they love best.
In 2023, firms should be especially conscious of the new regulations surrounding General Insurance Pricing Practices (GIPP). Regulatory changes are inevitable and can have a profound impact on businesses. To remain up to date with these changing laws, companies must take proactive measures to equip themselves with relevant data to ensure compliance.
Staying ahead of the trends that will shape 2023 is no doubt a difficult feat, but questioning how your data is managed and taking pertinent action to align with evolving regulatory expectations should be at the forefront for firms looking to stay competitive.
By taking these steps, not only will firms maintain a competitive edge and neutralize new market entrants’ threats, but they can also make considerable progress with digital transformation projects that have been debated for so long.