Insurance in the digital age

No more procrastination, it is now imperative for market stakeholders to be at the cutting edge of technology and to equip themselves with the appropriate tools required for performance.

Digital transformation is no longer a risky investment. Carefully planned, its cost is largely offset by the opportunities it offers.

The health crisis of Covid-19 is a good illustration of this contribution of digitalization to insurance. During the recent pandemic, the digital transformation has enabled insurers to establish, in a very short period of time, a new type of relationship with policyholders and prospects. This example provides a simple overview of the contribution of new technologies to insurance.

Digitalization is changing the entire value chain in terms of activities, tools and relationships with customers and other market players.

Digital transformation or the fourth technological revolution

Like other sectors of activity such as banking, insurance has nowadays largely crossed the threshold of digital transformation by reorienting its own business models.

The change has been slow and its adaptation difficult, and the advantages offered by digitalization have slowly come into play.

The investments conducted by the entire financial sector in new technologies are now considerable, triggering a profound change affecting corporate culture to the core.

Thanks to the innovations it brings, the fourth technological revolution offers new methods of communication and data sharing. Products, processes, data management and customer relations have, therefore, been deeply shaken.

Faced with this internal change, insurers who want to make their mark are compelled to rethink their traditional offers. It is imperative that they come up with solutions that appeal to customers. Today's customers are not only familiar with new technologies, but also enjoy using them on a daily basis.

Innovative and tailored solutions

Insurers who are resistant to new solutions risk losing market share. Therefore, they are required to:

• meet new types of communication needs: customers are now connected continuously, so they are more accessible and want more responsiveness. It is crucial for insurers to upgrade their processes in order to better respond to today's challenges,
• offer more innovative products: despite constant product improvements, insurers' offers no longer meet customer expectations. Insurers must now reinvent themselves and strive to look for new solutions, particularly from insurtechs,
• be endowed with a wide range of products at their disposal: customers are flooded with information with much better understanding of insurance than in the past. To better manage their assets and secure their financial situation, they expect a wide range of products, including advice, assistance and related services. Partnerships are therefore necessary with insurtechs who are able to expand their range of products and provide related services. This approach requires the development of platforms flexible enough to integrate partners’ offers,
• be fast and efficient: with the help of new technologies, insurers are bound to develop intelligent solutions. Low value-added tasks are automated, and resources are better utilized to ensure greater efficiency and profitability,
• enhance customer experience: customers who are satisfied with the services offered are likely to become loyal policyholders. Hence the need to mobilize all aspects of interaction with the customer in order to provide him with this type of a modern, so-called 360-degree offer.

As observed by Ernest Young, 40% of consumers choose their insurer based on the quality of their exchanges with the latter. This finding encourages insurance companies to offer multi-channel solutions: cell phones, the Internet, chatbots (chat with artificial intelligence), call centers, SMS or applications.

While insurers have undertaken major changes in their customer relations, agents and brokers are lagging behind in this area due to the lack of financial resources. Yet these intermediaries are an essential link in the insurance value chain.