In the current digital age, companies across sectors are embracing digital transformation.
Digital transformation refers to the integration of technology in all spheres of the business to drive fundamental changes within the organization. Technology is used to create new business processes, cultures, and customer experiences or modify existing ones, enabling businesses to operate efficiently and effectively.
The need for the same is felt now than ever before since the pandemic has made businesses aware of the need for an agile and scalable IT infrastructure and environment.
Digital transformation in the Insurance sector
According to the findings from SAP’s Digital Transformation Executive Study, 84% of companies globally agree and believe that digital transformation will be essential for their survival in the coming five years. It is thus important to understand the importance of digital transformation today.
This is especially true for the insurance landscape which is continuously changing as new and upcoming players try to create a niche for themselves and the old players try to leverage technology to disrupt the marketplace. Insurance companies, thus, need to step up their games, understand the value and importance of digital transformation, and embrace it.
- Enriched customer experience
Customer experience and satisfaction lie at the heart of most businesses. With improved technologies and processes, customers expect businesses to deliver valuable, easy, and fast solutions to their problems. SAP’s Digital Transformation Executive Study further suggests that 92% of the leaders have mature digital transformation strategies and processes in place to improve customer experience.
With artificial intelligence and machine learning, customers can now chat with bots and buy insurance online within seconds without the hassle of all the paperwork, helping customers and insurance companies to save time and money.
- Smooth collaboration across departments
Digital transformation makes it easier for businesses to analyze and understand data and insights to improve business processes, strategies, and performance. This promotes effective communication across departments as different departments can collaborate to achieve a common goal. By providing the teams with a tailored environment and the right tools, leaders promote digital transformation that facilitates a digital culture of open communication and collaboration.
- Better agility and innovation
Businesses must be open to innovate and adapt to develop new and improved processes and strategies. Digital transformation helps companies keep up with the changing market trends and customer needs by supporting an agile environment that is capable of evolving and meeting new challenges and demands.
Digital transformation in insurance enables companies to understand the constantly changing needs and demands of their digital customers, who expect relevant, personalized, and speedy services. It helps insurance companies to scale their businesses by facilitating an agile and scalable environment by harnessing new and enhanced processes.
- Improved Data-based insights
Businesses can use structured (personal customer information) and unstructured (social media metrics) data to track metrics and analyze data efficiently to gain relevant insights. These insights will help businesses to optimize their processes and strategies by driving improved customer experiences that are relevant, personalized, and agile.
Data-driven insights help insurance companies provide customers with a personalized experience tailored to their needs – be it micro insurance, flexible coverage options, or peer-to-peer products. This data also helps insurance companies to modify their existing policies and introduce new ones, keeping in mind the changing industry.
Successful insurance companies that went through digital transformation
Lemonade is an American company that offers renters’ insurance, homeowners’ insurance, and pet insurance policies in the United States. The company also offers contents and liability policies in Germany, France, and The Netherlands.
Launched in September 2016, the company, which is powered by AI and behavioral economics, has disrupted the insurance industry and are already on their way to reaching 50% of the US population. Lemonade has replaced brokers and bureaucracy with bots and machine learning to automate and perform simple tasks, offering its customers zero paperwork, affordable prices, and quick responses. The renter’s insurance at Lemonade starts at $5/month and home insurance at $25/month. These prices are not only 80% cheaper than the competitors but also time-saving as it only takes 90 seconds to purchase the same.
Additionally, the ‘Giveback’ program of the company that ‘gives back’ the unclaimed money (up to 40%) left from the customer to the customer’s chosen nonprofit organization has helped Lemonade earn a B-Corporation certificate.
With its refreshing and easy approach, Lemonade truly lives up to its tagline, “Insurance that doesn’t suck.”
Ranked 5th in 2016’s top insurance tech start-ups to watch out for, Trōv, is the world’s first on-demand insurance platform for single items. Trōv has revolutionized the way people are insuring things by moving all processes to smartphones through its signature feature, “swipe to protect.”
As a data collection application and digital platform, Trōv harnesses the information of the users and allows them to choose the things that they would like to insure for any period – from a year to a month to a week to even a day. What makes Trōv a hit is the fact that it provides people with the option to insure items by the second and pay by the cents. Additionally, claims managed by bots help manage the claims within days instead of weeks.
Digital transformation is not an easy and simple process that can be implemented overnight and yield results quickly. However, insurance companies need to catch up with the changing environments and developments. With recent developments, insurance companies have come up with on-demand, simple, flexible choices for customers with interpersonal relationships for maximum customer satisfaction.