Digital innovation in insurance: a key competitive lever in 2021

15 February 2021
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For a long time, the insurance industry has followed the market on its own timetable because of its mission, where proximity and differentiation are at the heart of services. In fact, it has always shown agility in implementing innovative solutions in terms of information and data management. But today, digital innovation in insurance requires a paradigm shift. In fact, it is no longer about rethinking itself, but rather about accelerating the pace of transformation of the sector.

Infoelsa’s experts decipher the world of insurance through the prism of digital innovation.

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Digital innovation in insurance: rethinking the customer path

For the past few years, the digital maturity of insurance companies has been steadily increasing across all major topics. The first of these is none other than the digitalization of their customer relationships, which is considered a disruptive tool. This is all the more true as consumers use insurers’ platforms to obtain, compare and even conclude information.

The shift to multi-channel at the heart of digital innovation in insurance

Even though the use of digital technologies is increasing in the insurance industry, this does not mean that other channels are being abandoned. For example, a policyholder can file a claim over the phone and track the progress of their file online or meet with an advisor at a branch. Companies therefore need to think of their CRM in terms of a multi-channel approach.

Relevant digital technologies to support changes in usage.

Digital technology in insurance is already well established, notably with the introduction of electronic signature of contracts, which encourages the conclusion of contracts online. However, certain technological building blocks are still missing, such as the automated execution of contracts through a blockchain or teleconsultation, which is a major problem for elderly members or those living in medical deserts.

Cloud and IS platformization

In a context where the impact of digital technology on the insurance industry is becoming increasingly urgent to ensure an optimized customer relationship, it is essential that insurers’ information systems evolve (insérer lien vers TEXTE2/DSI dans l’assurance…). The latter must become more agile in order to integrate future market and regulatory changes in the shortest possible time, but above all to become more mobile. In this sense, platformization, with centralization of data and the possibility of personalization at will, is a major facilitator of the digital transformation of insurance.

Digital innovation in insurance: towards new offers and services

The second stage of digital maturity in the insurance industry relates to the redesign of internal processes. While this allows maximizing the efficiency of tools, it is mainly the speed of response to market changes. It is therefore about the ability of each insurer to follow new uses or new expectations of its customers, but also to adapt to competition by introducing new offers.

Adapting offers to new uses

In recent years, the collaborative economy has become an integral part of all sectors and has accelerated the transition from an “ownership” economy to a “sharing” economy: seasonal rentals between individuals, car sharing, carpooling, etc. Insurance companies have been quick to embrace these new practices to create offerings that encourage the use of these solutions that help reduce risk. This is how “pay as you drive” or “pay how you drive” offers have emerged, which are approved by the majority of French people, as shown by the study “The French and health”, conducted jointly by OpinionWay and Deloitte in May 2018..

The new services offered by insurers

Thanks to digital technology, insurers have been able to offer new services that add value for their customers: online or mobile claims management, home monitoring, electronic filing. These services often go beyond the boundaries of traditional insurance and compete directly with those of other industries. This can be explained by the particular position of insurers at the crossroads of policyholders’ concerns (housing, health, travel), with the consequence that they are able to design and develop offers enriched with various themes such as assistance, prevention, coaching, concierge services, etc.

Data and cybersecurity at the heart of new offerings

Cybersecurity is one of the main concerns of insurers operating in a sector where data breaches are a challenge to business sustainability. Another security concern is the detection of document forgery, which is on the rise as digital technology becomes more prevalent in the insurance industry, especially with the widespread use of photo editing software.
As for the data itself, it is at the heart of future innovations by insurers. Indeed, harnessed through machine learning and artificial intelligence, they are a valuable tool for launching new offerings that are responsive to usage, behavior and the need for risk prevention.

The shift to automation

The final stage of digital maturity in the insurance industry, process automation, is based on the creation of ecosystems based on partnership and the evolution of the economic model. By using digital technology, insurers can offer new personalized services.

Motivations and barriers to automation

As in other industries, insurers automate their processes for two reasons: to optimize costs and to improve the customer experience. In this context, digital transformation allows them to integrate the regulatory aspects of the insurance business, as well as compliance and anti-fraud issues, into existing processes more quickly. However, there are two barriers to their generalization, namely the technical aspects due to the age of certain IS and the financial investment.

Automation Tools

Currently, there are some digital tools that insurance companies can use to strengthen their CRM or increase knowledge about their policyholders through home automation. Chatbots, which are becoming increasingly popular, have the advantage of covering both possible application areas. In addition, there are :

  • AI platforms for real-time monitoring of services;
  • Robo-advisors offering personalized savings management service;
  • RPA that facilitate repayment processing or reporting;
  • Blockchain for smart contracts.

Whatever the tools, they are designed to improve the efficiency and reliability of data collection.

In summary, digital innovation in the insurance industry involves multi-channel interactions that insurers have proactively integrated. However, while the digitization of the industry is advancing, value-added automation tools are slow to catch on due to the associated costs. That’s why Infoelsa is constantly innovating to help you modernize your information system and democratize access to process automation.

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