December 16, 2022

Will Traditional Insurance Survive the Digitization in Insurance?

Insurance agent offering digital insurance

As the world becomes increasingly digitieed, technology continues to disrupt virtually every aspect of what we do. When it comes to insurance and technology, you might wonder whether digitalization in insurance industry will replace traditional systems with new processes. The answer to that question lies in how the leading players in the insurance industry adopt innovative new strategies, tools, and processes powered by technology into their daily operations.  

The possibility of digitalization in insurance industry is not baseless. As we see a world turning into all things digital, we’ve already seen tech-driven innovations impact the eCommerce industry. Let’s look at how digitalization in insurance industry might impact the future of insurance, with a little perspective on its impact on another major industry.  

How ‘All Things Digital’ Impact the E-commerce Platforms  

The term “all things digital” refers to the adoption of digital technologies to drive innovation in existing systems and processes. It is already showing its impact on eCommerce platforms, with the likes of Amazon integrating disruptive technologies to revolutionise how they work. From contactless delivery and payments to AI-powered service and product recommendations, “all things digital” has transformed eCommerce for the better.  

While the insurance industry has been slower to adopt digital transformation, there is potential for ecosystems and platforms for insurance to look entirely different from what we will see in a few years.  

How Digitalization in Insurance Industry Impact the Future of Insurance?  

Digital transformation disruption can transform the entire insurance industry landscape. The question shouldn’t be whether digitalization in insurance will replace traditional insurance. It is already happening.  

A better question would be how it will take place. The urgency for change is clear. Sophisticated tech-driven capabilities already provide insurers with greater capacity for growth and efficiency. Insurers with access to market-leading analytics are already leading the charge.  

Customer demands have changed, and digital marketplaces now focus on addressing those needs. Today’s customers can be categorised as digital natives, and their expectations of quality and agility in digital offerings from insurers are forcing change. Some major shifts in insurance operating models include creating vertically integrated and end-to-end optimised business models that are agile and digitised.  

AI-driven access to more impactful digital data can drive more insightful strategies. Insurers can use better insights to reshape their offerings across all segments, from auto, health, property, life, and travel insurance. Embracing innovation across every viable channel can help them connect more easily with customers to offer insurance products that are more relevant, making it easier for them to compare and find suitable products and better understand policies that are suitable for their needs.  

Digital Transformation Strategies for Insurers  

The digitalization in insurance industry may already be underway. To thrive in the future of insurance, here are some digital transformation strategies that they might want to consider:  

 Leveraging AI and Machine Learning (ML)-driven marketing analytics and strategies to improve daily operations, such as mining voice data for customer service, reducing claim costs, and detecting insurance fraud.  

 Taking advantage of predictive analysis and ML for intelligent automation and transforming legacy processes, for instance, claims processing and property assessments.  

•  Understand and identify viable approaches to integrate self-service in claims settlements and customer care for enhanced customer experiences.

 Leverage digital data-driven strategies to implement cost-cutting measures and introduce new products.  

  Utilise tech-driven solutions to help simplify coverage decisions, damage prevention, and enhance user education.  

It is not about whether digitalization in insurance industry will replace traditional insurance. Insurtech companies are fully leveraging the innovative tools available and are already leading the charge. The broader insurance industry is at a critical crossroads where it has to embrace the benefits of digital transformation, fully learn from insurtech’ s leading innovation, and work towards a more successful future for the industry.

Wesurance is a UK-based Insurtech company that offers a platform for insurance companies and brokers to create and sell Insurance eCommerce. Build digital insurance without IT assistance using a drag-and-drop platform. Find out more here.

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