Digitization of Insurance (Advantages and Trends)

Like all other sectors and industries, the evolution of the online world has been a driving force for bringing advancements in the insurance industry too. The new technologies are changing the way customers and insurers interact with each other. The digitization of insurance has eased up things for the customers and also benefited the insurers in multiple ways. In the article, we’ll talk about the new trends that this digital revolution has brought into the world of insurance and how has it proven to be a boon for everyone.

Digital Trends in the Industry

The Digitization of insurance has revolutionized the entire insurance industry. The implementation of digital factors has brought about changes that have improved user experience for the insurance holders. Here are a few of the digital trends that the industry is witnessing:

1.) Online Purchase of Insurance

The facility to be able to buy insurance online has eased up things for several people. Now, people can get insured from the comfort of their homes or wherever they want. The need to meet the agents in person has been eliminated. They can read about the various policies available online and choose the one that suits their needs the best. People do not even need to take time out of their schedule to meet or talk to the insurance providers. Over the internet, they can buy insurance whenever they get time.

2.) Artificial Intelligence (A.I)

A personalized experience is what customers look forward to. The advent of Artificial intelligence has made customizing unique experiences for customers possible for insurers. Besides this, AI also takes care of the demand for high-speed and quick claim settlements along with improving the underwriting processes. AI also enables the generation of more accurate data within a less span of time.

3.) Role of social media

The insurance industry has seen tremendous growth in the past few years, and social media has played a vital role in that. Advertising over social media has made it possible for insurers to catch the attention of the youth and explain to them the importance of insurance. Social media has become one of the platforms through which customers can research on insurance companies, their offerings and also read reviews.

4.) Chatbots

AI Chatbots quickly generate the answers to the frequently asked questions. Most of the insurance companies on their websites or apps have activated Chatbots. This helps the customers to save time and get more information quickly. It also increases the scope for the customers to go through the various policies and products offered by the insurance company.

5.) IoT or Internet of things

IoT is an interconnected network of digital devices enabling insurers to take initiatives to improve their services. Through this technology, insurers can get access to a huge amount of data related to the policyholder’s and their target audience’s life. This can help them create new products and make changes as per their consumer’s requirements.

Advantages of Digitization of Insurance

Insurance companies know that utilizing the latest technologies and tools is the best to provide an exceptional experience to their customers. Let’s look at the few advantages that digitization has to offer:

1.) Cost Reduction

Digital processing has helped in cutting the brokerage cost. It also aids in cutting the cost of advertising, operating expenses, and infrastructural costs. This is because digital advertising is a lot less costly than traditional advertising and since everything is now digitally done, insurers can reduce their amount spent on infrastructure and other aspects and in turn lower the operating cost as a whole.

2.) Assures Safety

As the insurance industry is eventually going digital, the chances of loss of the policy papers or other documents are eliminated to a great extent. Also, the documents, policy papers, or forms that are submitted online can be accessed from anywhere and at any time. Digital transactions also reduce the chances of information leaks and miss-selling.

3.) Convenient Transaction

Modern customers require quick and easy settlements of their needs and responsibilities. Online transactions make settling various insurance-related processes convenient. Things like the renewal of policies, payment of premiums, filing claims, and all the other procedures are simplified which enriches the overall experience of the customer.

4.) Post-Sales Services

The general impression that the customers are neglected after the policy has been sold has changed because of digitization. Post-sales processes such as raising claims, etc. have become hassle-free and less time-consuming for the customers. Insurance companies are also actively using their social media handles and other digital channels for promoting customers to give their feedback.

They are using these digital means to bring into notice their customer’s grievances and resolve them effectively. All of these have helped the insurers to provide better post-sales services.

As compared to the traditional ways, digitization of insurance has improved the communication between the insurer and the insured. It has led the insurance companies to accept the consumer-first business approach which has resulted in the growth of the insurance sector as a whole.