Subject to strong competition, the insurance sector must make major changes to catch up in the digital field. At the heart of its concerns: the use of technology to offer products with high added value and a better customer experience.
Digitization is relatively recent for the insurance profession. Contraste has supported major players in the sector in the development of their profession for many years. We see that these large historical paper consumers are now turning more and more to technology, to the point of creating teams responsible for appropriating and exploiting digital tools.
Insurance companies face more than three major challenges in 2020. First of all, they face ever stronger competition linked to the development of insurance comparators but also to new entrants to the market. They often offer an innovative approach, or even insurance offers integrated within products.
Then, changes in consumption patterns impact the sector. Digital is now fully integrated into the everyday life. It's about improving the customer experience and offering increasingly personalized offers and services.
The last, but not the least, the challenge is to ensure compliance with increasingly sophisticated regulations. In this context, insurers are now subject to close supervision and must report to the supervisory bodies (FSMA, National Bank).
Faced with these challenges, how do companies react and what are the big questions they ask?
The Cloud: Risks but above all opportunities?
Insurers are looking for agility. Migration of their applications to the Cloud is now part of their strategy to reduce costs, develop their reactivity and free themselves from time consuming tasks, such as server maintenance.
However, one of the main challenges is to guarantee the security of sensitive data, especially those relating to health. The GDPR has gone through this, and brings a real strategic reflection on the transition to the cloud. Should we put all the applications in the Cloud or only partially? Can critical applications be placed there?
We note that the actors of the sector seem to have chosen to test the use of the Cloud first on a part of their activities. Deployment in all other areas will be considered once reliability, security and certified by an organization. The goal is to simplify IT, not take risks at the expense of customers and the business.
Customer Relations: Digital but Human?
Will 2020 see a return to a more human approach? There is indeed a desire to offer a customer experience adapted to each situation and each customer, by developing a multi-channel approach.
Customers are looking for more autonomy, to manage simple or recurring tasks but also more regular and personalized interactions. Thanks to centralized management of customer information, new online services and interaction via non-digital channels become complementary.
This is how we see the development of an approach that is sometimes completely digital, sometimes mixed. This approach allows employees to focus on value-added advice and support tasks.
Data analysis and AI: Automation and Personalization?
In 2020, IoT and AI will play an important role in the development of new offerings. Collecting and analyzing customer data has become a real challenge. Well managed, they certainly offer real opportunities to optimize the processing of requests or develop innovative products, adapted to the lifestyle of customers.
Measuring and adapting prices are the keywords. Personalized insurance contracts are already based today on the integration of connected objects such as boxes in cars to record driving behavior. On the other hand, these technologies also allow insurers to put in place increased fraud control.
Insurers are also starting to use artificial intelligence to automate time-consuming tasks. Two examples are very telling. First, the use of chatbots is gaining momentum despite some reluctance. The lack of human intervention in the management of relationships in emotionally difficult contexts still arouses debate. The second example concerns the automation of the creation of contracts. There are applications that intelligently group and integrate data from official documents such as identity cards. Save time guaranteed.
Assuretech: Joining and differentiating?
With the appearance of multiple web start-ups, known as “Assuretech”, insurers must react today. Indeed, these companies offer very competitive prices, thanks to online offers, without intermediaries. Companies are led to develop partnerships with these innovative companies. Insurance companies must differentiate themselves and offer high-quality offers, providing value-added service. Do not offer 100% digital at all costs but focus more on the customer experience (easy access, procedure ...), providing advice in your choices and support during claims.
Insurance companies also remain in real competition to attract and retain brokers. Being the one offering the best technology is a major argument. For this, companies seek to anticipate the expectations of brokers, who are extremely sensitive to facilitating the management of their activities.
An ecosystem in danger?
Customers increasingly want to make their lives easier. They therefore appreciate that everything is included in their purchasing process, including insurance. We have therefore entered an ecosystem economy more than ever, and this is threatening the existence of insurance as a sector in its own right.
Once again, the sector must reinvent itself to remain attractive. When buying a car, why still go through an insurer when the assistance contract can be included?
To maintain their status, insurance players will have to think about how to go beyond their usual risk coverage mission and diversify with value-added services such as advice on the coverage of different offers.
Today's digital transformation is pushing insurers to get to know their customers better and to adapt. It provides the tools that allow them to create high value-added service offerings and enrich the customer experience.
Great opportunities are the key. The digital transformation should also allow them to reduce their costs, gain in responsiveness and quality of services.
To know :
For almost 20 years, Contraste Europe has supported insurance companies in the development of their business and their IT projects. Discover our services dedicated to the insurance sector.