Digitization is finally gaining momentum in the insurance industry. TransUnion has identified insurance digitization as one of the four insurance trends resulting from COVID-19. Digitization efforts grew 20% in the past year, and rapid digitization is expected to strengthen in 2021.
Most of us recognize that digitization is the way of the future, the only question is how to get there. To build a digital center of excellence, insurance companies will need to succeed in four areas: IT & security, customer experience, finance & accounting and claims management.
Let’s take a deeper dive into each of these cornerstones.
Technology can be a double-edged sword. It’s fantastic when things run smoothly, but it can be disastrous when things don’t. Crashed systems aren’t the worst thing that can happen, either. Data breaches, phishing schemes and ransomware attacks are growing challenges, and new data protection laws like the CCPA and the GDPR make compliance more important than ever.
Successful digitization depends on solid, secure technology. This includes a centralized platform with streamlined integration, as well as hardened digital security and proactive risk strategies. Privacy and notification laws are very complicated and vary by state, so it’s also important to have systems in place to simplify regulatory compliance.
If policyholders don’t trust that their personal information is being protected, they might take their business elsewhere. Maintaining security and compliance is an ongoing and resource intensive process that insurers may be well served outsourcing to a specialized third-party service provider who can reduce both risk and exposure, all from one comprehensive platform.
Insurance customers have their own criteria for rating digital tools. They want modern, fast and intuitive experiences. At the same time, one size does not fit all. We now have many different communication vehicles – including chat, text, email, and phone – and preferences vary according to both personal and generational differences.
Payment preferences also vary. Some people still prefer paper checks, although that option is declining in popularity. Now, many consumers expect fast, convenient choices, like autopay, in-app pay, and pay-by-text options.
Delivering a convenient and seamless customer experience with your branding applied consistently at every touchpoint is important. By leveraging emerging capabilities to engage with policyholders using their preferred communication and payment methods, you can significantly increase satisfaction – leading to improved policyholder retention.
The digital experience must be great for policyholders, but it should also make life easier for your finance and accounting teams. What do they care about? Efficient receipt and recording of premiums, high collection percentages, and fewer past due payments are all high on the list.
A digital center of excellence can achieve those goals and more. This kind of progress doesn’t have to be expensive, and it should not require you to give up existing banking relationships, either.
Real-time data and line-item detail make analyzing payment activity quick and easy. In addition, digital tools can also give you the comprehensive data and aggregated reconciliation capabilities you need, with centralized reporting options to ensure you’re always in control and equipped with the right information to make smart decisions.
Digitization is allowing insurers to get ever closer to achieving their goals of straight through processing and touchless claims. Although insurance processes are changing – the claims process remains of vital importance. If a claim goes badly – or slowly – the claimant might quickly switch to a competitor. At the same time, insurers need to protect their bottom line by identifying fraud and mitigating loss. An optimized process benefits both the insurer and the policyholder.
Speed is key. In October 2020, J.D. Power reported record-high customer satisfaction with auto claims, and it’s no coincidence that claims processing time had also improved, dropping from 12.6 days to 10.3 days for claimants with reparable vehicles.
Successful digitization involves bringing multiple parties together, including the claimant, the representative who takes the first notice of loss, the adjuster and the vendors. This requires an efficient claim center and supported vendor onboarding for an optimized experience from start to finish. Digital claims payments play an important role, expediting time-to-close rates.
Building a digital center of excellence is infinitely easier with a highly experienced partner by your side. That partner is One Inc. We provide digital payment technology designed specifically for the P&C insurance industry. As your single source for inbound and outbound digital payments, we facilitate superior policyholder and agent experiences. We can work with your existing banking relationships and we offer fast, streamlined setup and integration. Learn more.
Want to learn more about the digital trends, technologies and strategies that are redefining the insurance industry? Get the New Insurance Experience whitepaper today.