Technology is advancing so quickly that if you blink you miss an update. The public primarily focuses on new developments in entertainment and computing, but businesses, especially in competitive industries like insurance, need to focus on product and service enhancing developments. Of these, there are plenty. However, not all industries have been quick to capitalise on the benefits of upgrading their behind-the-scenes systems. As we know, insurance is one of these, with an estimated 82% of insurers of the opinion that growth is hampered by outdated technology.
According to research by Redcentric, legacy systems, which deliver ‘good enough IT’, keep insurers and brokers stagnant. They are too limited to offer the opportunities that modern systems provide, which prevents access to a whole new demographic, the mobile consumer.
Why do insurers and brokers think that good enough is enough?
Reasons are varied, but the most common are related to perceived cost and concern that change will make things worse, not better.
The reality is that migrating to new and improved platforms is not that expensive, especially when weighed against potential gains. And, the industry has reached the point where if insurers and brokers don’t migrate they will haemorrhage customers and have to close up shop. It’s that simple.
Why good enough is not enough
A lot of consumers research and buy insurance online. It’s convenient. It’s usually affordable. And, if they don’t have to speak to a real person, so much the better. This is especially true for emerging spenders – millennials. They really can’t be bothered with traditional business models. If you want them in your stable, you have to woo them. You can’t woo them if they don’t know you exist. And they won’t know you exist unless you embrace the digital tech revolution and make yourself easy to find on personal mobile devices.
This entails 2 things:
- Get your a**e online
- Leverage the cloud
One of the great things about going online is that systems are (usually) completely customisable. You don’t have to put up with (and pay for) features you don’t use just so you can get the ones you do. A system that caters to your unique needs does 5 things:
- Increases efficiency
- Improves customer satisfaction
- Promotes productivity
- Boosts revenue
- Drives growth
Upgrading also saves time because you aren’t constantly fixing bugs, looking for patches, and calming irate staff and customers because processes aren’t completed.
Every cloud has a silver lining
Not only are cloud-based business systems customisable, user-friendly, and affordable, but they’re also mobile. We mean that information, files, and documents are accessible from any device that has a registered user. This means you can save your presentations and reports and access them on the train, from home, from a client’s home, from the airport, and from your hotel in Budapest. You don’t have to worry about forgetting your USB at home, or about leaving it in a coffee shop where anyone can find it and access private business documents.
It’s not just enough to move business management systems online, however. Insurance products and services also need to transform. Apps are big business and something that insurers should seriously consider. Simon Michie uses Aviva’s ‘gamified’ insurance offering as an example of how to lure the millennial market.
It’s also important to think mobile when targeting customers. Mobile-friendly website versions are essential.
It’s important to consider your specific services when you choose which tech you’re going to upgrade to. For example, Michie says brokers need to concentrate on tech that improves customer engagement, especially when it comes to “controlling and managing the digital experience”. The idea is to increase satisfaction by providing personalised service and products while lowering or maintaining low costs. Aggregators and data analytics are valuable in this regard.
It’s also a good idea to look around for promising start-ups that are delving into innovative insurance technology. It’s not that difficult, actually, because many of these start-ups aren’t looking to usurp insurers but to partner with them. Insurers and brokers can use these partnerships to round out their services and fill gaps that they can’t fill on their own. According to a recent report, areas where insurance start-ups have made the most difference include staff efficiency and customer engagement. And far from increasing costs, start-ups can actually provide benefits that result in lowering costs, especially when it comes to admin.
What’s more, proper use of big data and analytics technology can prevent fraud. What’s a better money saver than that?
According to Keith Swanson, director of Asia Pacific fraud and security intelligence for SAS, the right tech can flag potential fraud right at the beginning (quote) stage of the insurance process. It can also identify questionable claims right off the bat, so they can be investigated timeously.
Choosing tech that customers want
Upgrading systems is as much about your customers as it is about you. So you need to choose products that are going to make customers’ lives better. For example, a recent survey found that 85% of insurance consumers want feedback on how they can lower their risk (change their behaviour) to lower their premiums.
Insurers and brokers need access to big data and specific data to provide this. Obviously they also need to be able to analyse and interpret data. And, because 56% of consumers want premiums calculated to their exact risk profile, insurers need to use data from lifestyle tech, like health monitors and telematics, to work out accurate figures.
There is no reason on this earth for insurers and brokers to worry about upgrading their tech. Instead, they should worry about what will happen if they don’t take that critical step.