The insurance industry is facing unprecedented disruption. Insurance carriers have been called to transform customer experience, business offerings, and operations. As an insurer, your current business models are being challenged by new thinking, new competitors, and new ways of working. The stakes are high—successful transformation can bring you new revenue opportunities, stronger customer relationships, and sustained brand relevance. And if you don’t adapt to the new environment you may find yourself behind the curve—with your competitors gaining ground, your costs soaring, and your customers open to more progressive alternatives.
The pace of transformation has accelerated in the insurance industry in response to some key drivers:
- Expectations of an engaging, self-service experience from digitally savvy customers along their entire journey—from marketing and purchase/underwriting to inquiries and claims
- The rise of insurtechs and their innovation in distribution, underwriting, and pricing—placing pressure on the incumbents
- Increased demand for new products tailored for customer lifestyles such as pay-per-use insurance and new capabilities such as individual risk-based pricing
- Broker consolidations from M&A, requiring that you make it easier for your best performing brokers to work with you, so there is no incentive for them to switch to your competition
- Use of AI and IoT to support real-time risk assessment, individualized pricing, and fraud detection—and to offer new value-add services such as loss prevention
Customer centricity became a key focus area to respond to market demands
Innovative carriers are responding by becoming customer-centric, building trust with their customers, creating an expansive digital strategy, and bringing new products to the market. WBR insights recently surveyed 100 technology leaders from insurance companies to explore what digital strategies insurance CIOs are focusing on for the next few years. They published their results in a report titled “Insurance CIO Mega Trends, Building Effective Digital Strategies in a Transforming Insurance Market.” Below are some very interesting findings from the report.
- When asked to identify two of their top goals for improving customer experiences in the next 12 months, nearly half (44%) claim they will offer a personalized, contextual experience on every channel. Over one-third (37%) will gain visibility into the end-to-end customer journey.
- When asked to identify two of their top goals for improving operational efficiency in the next 12 months, over one-third of respondents (36%) claim they will enable intelligent automation for personalized marketing. Nearly one-third (32%) will increase self-service options for policy changes, first notice of loss, claim status, and others as well.
The following graphics lists how respondents ranked various initiatives for improving customer experiences.
Working with trusted, timely data is a must for profitable growth
Yet, as you and your peers embark on these transformation initiatives, a crucial challenge you run into is the quality of your data and your data management practices.
- You cannot deliver a seamless experience across different channels with incomplete, fragmented, outdated data
- You cannot offer relevant products and services without knowing the customer’s end-to-end journey or having a complete view of your policyholders, their claims, and their households
- You cannot reduce claims leakage and fraud when you work with incomplete or outdated data
- You cannot easily share trusted, timely data with your partners to offer new products when your core data is locked in legacy systems
- You cannot build trust with your customers when you cannot track their communication preferences and honor their data privacy consent
These are just a few examples of how having access to insight-ready data in real time is essential to improving the customer experience, optimizing your operational processes, and ensuring compliance with data privacy regulations. Bringing together customer, policy, broker, claims, and other information from numerous disparate data systems into a unified and complete view in a timely manner is not a trivial task. This is especially true when your critical policy and claim data is trapped in legacy systems.
The WBR study also highlighted this issue. In fact, 82% of respondents state that fragmented data poses a challenge when attempting to deliver seamless customer experiences. And 53% of the respondents agreed that data management—including integration, quality, and MDM— and real-time data integration and processing will have a significant impact on the insurance industry as a whole.
Insurers enable key business initiatives with modern data and analytics solutions
Although digital transformation doesn’t happen overnight, tangible positive results are starting to appear. “Creating value, finding focus: Global Insurance Report 2022” by McKinsey & Company notes: “Leaders see enormous potential in best-in-class data and analytics capabilities across the value chain, even for the highest-performing companies. For example, even the leading P&C insurers can see loss ratios improve three to five points, new business premiums increase 10 to 15 percent, and retention in profitable segments jump five to ten percent.” Similarly, Aberdeen’s research report indicates that financial services firms that invest in unifying their customer data show significantly higher improvements in key business metrics such as customer retention, customer lifetime value, and average profit margin per customer, as compared to their peers in the industry.
Among our insurance customers, we also see heavy investment in cloud-based data and analytics solutions for various business initiatives to drive profitable growth and minimize costs and risk. Below are the data-driven growth, efficiency, and risk management initiatives our customers prioritize. Customers such as Empire Life achieve tangible business outcomes by using our modern, cloud-native SaaS MDM capabilities in implementing one or more of these use cases.
We explained these initiatives insurance executives are implementing in a new ebook: “Insurance Industry Trends and Solutions for Data Challenges.” You will find out:
- The key trends in the industry
- The role of working with insight-ready, timely data
- How these business initiatives deliver growth, efficiency, and minimized risk
- How you can proactively address your data challenges using a modern, cloud-native master data management technology
- Reltio for Insurance solution that delivers fast implementation with out-of-the-box data models and configurations
We invite you to check out our “Insurance Industry Trends and Solutions for Data Challenges” ebook and contact us for a customized demonstration of our insurance solution.