While digital innovation has become the norm in many industries around the world, the COVID-19 pandemic has expedited the urgency to move to digital and – out of necessity – has pushed many companies into it much faster than expected. But insurance providers, particularly in commercial, have been slow to shift to digital.
If easy-to-use mobile apps, auto-filled eForms, instant data validation, automated workflow, electronic payments and real-time status updates are available when ordering pizza, why can’t those technologies be implemented for commercial insurance?
Digital transformation can help insurance companies meet new customer expectations, while enhancing work structures and improving processes and profitability in the new world of social distancing.
The demand for digital is growing
The insurance industry has been experiencing a shift in customer preferences and expectations. Just as in other businesses where there has been a rise in on-demand services and products, factors like accessibility, product diversity and ease of use are driving consumers’ decision-making in insurance. The end user expects interactions with service providers to be fast, efficient and as simple as possible. But the insurance industry has lagged behind other industries in giving consumers what they want – a seamless, fast and easy digital experience.
For younger generations of consumers, digital interaction with financial service providers was already well entrenched. COVID-19 and the resulting social restrictions have forced many other consumers to adopt digital out of necessity and it is doubtful they will revert back to old habits.
Consumer expectations and demands are setting the pace of progress in consumer and commercial insurance. Digital innovation has become critical for acquiring new customers in expanded markets, retaining existing clients and launching new products or services, all at a lower cost per customer.
These factors accelerate the demand for digital offerings and force companies to act immediately. Direct insurers have many solutions that can be tailored to their customers’ needs to improve their overall experience. These range from basic user interface redesign to advanced technologies, including the internet of things, augmented reality and virtual reality. Many insurers are also opting to take this opportunity to redesign their business processes and product offerings to better meet these new consumer expectations and demands.
In commercial insurance, customers and employees are asking: why are processes so manual and time-consuming when digital technology is seemingly ubiquitous in all other aspects of our personal life?
Digital will define the future of the insurance industry
The revolution in customer expectations is triggering an evolution across businesses, small and large. Nearly every insurance company, regardless of size or structure, must consider when and how to transform to a digital company. The industry’s sluggish adoption of digital leaves incumbents vulnerable to new entrants catering to digital customers. The good news is that companies who’ve introduced digital capabilities have already started seeing the benefits.