Insurers Achieve Competitive Advantage with the Help of Digital Channels

Today, all industries recognize the importance of digitalization for their future. The insurance industry is no exception as it embraces new technologies to stay competitive. In this article, we will explore how insurance can benefit from digital channels such as chatbots, web portals, and mobile applications.

It is important to note that being “online” and being “digital” are not the same. Many insured individuals mistakenly use the term “digital” to refer to anything that happens online. However, this is incorrect. For example, when individuals purchase policies on a website or send documents to an insurance company, these actions should not be considered “digital.” On the other hand, when a claim is reviewed by software that assesses the level of damage (such as in car insurance), this can be considered a “digital” capability. Another example is using AI-powered health checkers to determine which doctor to reach out to. Additionally, digital solutions can be used in insurance underwriting to assess risks and determine coverage eligibility.

Introducing digital capabilities to insurance organizations is a complex task as human involvement is still necessary. However, digital solutions can greatly simplify the work of insurance agents. Now, let’s discuss the benefits that technology brings to insurers.

From a policyholder perspective, there are several key advantages of digital channels. Customers expect to be able to perform insurance-related operations on their mobile phones, have access to products and services anytime and anywhere, easily understand what steps to take, quickly communicate with a consultant, and receive personalized and cost-effective offerings. If an insurance company can fulfill these expectations, customers will prefer their services over competitors.

For insurance companies, digital channels present challenges due to the large volume of clients and diverse policy types. Skilled human staff are essential, and digital channels can serve as supplementary tools to support and simplify repetitive tasks. Digital solutions can help insurance companies embrace a paper-free and branchless approach, simplify call center operations, improve customer engagement and loyalty, and create personalized offerings.

Digitalization can also lower insurance costs in the long term. While initial investments in software development may be high, more accurate risk and coverage calculations can lead to cost savings. Many tasks can be delegated to artificial intelligence, reducing the need for a large workforce. Insurers can provide personalized offerings based on factors such as driving history or behavior, attracting more customers.

Unfortunately, not all insurance companies are ready to embrace digitalization. Legacy systems, lack of skilled IT staff, and other hurdles can impede progress. However, professional consulting provided by software vendors with insurance expertise can help guide companies through the change. These consultants can assist with the development of customized web portals, mobile apps, and chatbots, which are effective tools for improving customer engagement and loyalty.

In conclusion, the insurance sector has been relatively conservative in adopting innovative technology. However, forward-thinking players are integrating online and digital channels into their workflows to cut costs, fine-tune pricing strategies, expedite service delivery, minimize paperwork, and maintain constant customer communication.

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