Digital in Insurance; The Buzzword Delineated
The digital era is a new reality; insurance is no longer shying away from glancing at its landscape through this lens. The Digital Insurance Platform Market report anticipates a surge in global market valuation, from $124.43 billion in 2023 to an expected $231.89 billion by 2028. The market is forecasted to experience a notable compound annual growth rate (CAGR) of 13.3% during this period.
Technology disruption has radicalized critical processes, enabling insurers to re-shape their priorities with better strategies. Besides re-designing the operational models for agility, digitization has positively impacted customer experience with AI-led tools, offering a customer-first approach and swift response mechanisms. From streamlined claims processing to more efficient underwriting and cyber risk mitigation, the benefits of digital transformation in insurance have compelled insurers to re-invent businesses with accelerated business models for more growth opportunities.
Tracking the Trends
A game-changer for insurers and customers, the digital realm has brought remarkable advancements in insurance services. Creating more value at a faster pace, some of these trends include:
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IoT Solutions and Cloud
Cloud solutions have upped the flexibility, scalability and affordability for insurers, offering storage solutions for the mammoth data involved.
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Advanced Analytics and AI
Facilitating data-driven predictions and automating repetitive tasks using AI enhances efficacy and reduces costs. A Data Bridge research states that the cost of claims processing is reduced by 50-60 percent using AI and the processing time is reduced by 90 percent.
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Blockchain
As an evolutionary tool to create secure contracts and automate paperwork, blockchain is fast gaining imminence for optimizing and securing transactions. With an expected total market size of USD 22 billion by 2025, the global cyber insurance market promises the potential for insurers and safety for the users.
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Telematics
Telematics has revolutionized auto-insurance by enabling real-time data monitoring through fit-in devices. Relying on the data and insights it allows insurers to offer usage-based insurance.
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Conversational AI
Machin learning and AI are re-inventing customer service with chatbots and AI-led systems that deliver a human-like experience and add to the quality of customer engagement
Penetrating the Global Landscape Advantageously
Insurers across the globe are quickly adapting to the digital realm, envisioning sustained growth for the future. Some key benefits of digital transformation in insurance are:
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Enhanced Customer Service
Multiple service platforms have improved insurer and client dynamics. With omnichannel experiences catering to all client needs through e-mail, phone, and social media, transactions and services are undergoing a facelift. Customer engagement is more streamlined and allows the insurers to spend more time on innovative solutions. According to a PWC survey, as many as 43 of percent consumers are willing to pay more for a better customer experience.
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Superior Outcomes with AI
Predictive modeling is being deployed to promote informed decision-making. AI-driven tools, advanced analytics and automated functions facilitate swift service and reduce operational costs. Artificial Intelligence-driven innovative applications are futureproofing the business by helping insurers calculate risk and mitigate potential hazards. Metromile, a U.S.-based vehicle insurance company, uses a pay-per-mile model leveraging predictive analysis and allows its customers to save almost 47 percent on average.
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Simplified Claims Processing
Smart contracts through blockchain entail information sharing through a secure, safe and efficient channel. Technology-enabled transactions create an extra safety shield on every claim processed. As a result, claims processing has become seamless and more transparent. 70 percent of insurers’ costs are generated through claims processing (as per Deloitte) and deploying AI along with omnichannel platforms can improvise the process’s accuracy and productivity, saving the insurers time and money.
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Regulatory Compliance Adherence
Direct access to insurers safeguards the customers from fraud through brokers/mediators. Easy comparisons through digital channels ensure the best service offering at optimal pricing.
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Increased Efficiency and Cost Reduction
By reducing human intervention and enhancing the quality and speed of operational aspects, Robotic Process Automation(RPA) and AI add a competitive advantage to insurers while minimizing operations costs. According to McKinsey, over 1 trillion dollars of bottom-line improvements can be achieved through AI-based automation for the insurance industry.
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New Revenue Opportunities
Implementing innovative solutions and services crafted with data analytics enables insurance providers to think for the future and create new revenue streams.
Discovering the Benefits of Digital Transformation in Insurance with WNS
WNS has been steering digital transformation for key insurance providers globally. It recently partnered to deliver business value for a leading insurance company by reinventing its digital strategy.
An insurance major with a proliferating customer base and expectations struggled to provide seamless and quick service owing to fragmented operations and a lack of performance metrics. As a collaborative partner to the group, WNS:
- Conducted a gap analysis and created a holistic strategy to amp the services digitally
- Built comprehensive tracking mechanisms and metrics for timely reporting
- Leveraged the WNS web chat center to consolidate customer services
As a result of the interventions, the process efficiency increased by 35 percent, with a 45 percent improvement in the CSAT scores. Over 70,000 customers were being seamlessly serviced through the new digital channels. The organization now has a productive digital strategy, enabling it to handle 160+ percent more volumes.
Conclusion
The rapidly evolving business and technology landscape for Insurance is challenging yet rewarding. Digitization has equipped organizations with processes, tools and products to navigate the ongoing change and step into a future of abundant opportunities. Embracing these futuristic technologies is critical to collaborating within a partnership ecosystem and staying relevant.