Digitizing the insurance industry has been a struggle since the dawn of the Internet. In many ways, the industry is still tied to its 20th Century ways with the agent taking lead and filing cabinets weighing down the landscape of every branch office in America.
In the following article, we’re going to look at some of the challenges and solutions to this. The goal: to bring the insurance industry into modern times. Let’s begin!
1. The Way You Have Always Done Things
Insurance industry data is, unfortunately, quite fragmented. This is a struggle at every level, from the freshly-minted agent to the large multinational company.
There’s a lot of speculation out there as to what causes it. But in our opinion, it’s a single underlying mindset.
And that mindset can be summed up in one simple phrase. “But that’s the way we’ve always done it.”
This is the prevailing thought that leads companies to track the wrong data while ignoring factors important to their continued growth. In short, it’s what keeps them from preparing for the future.
The way to escape it is through continuing education. That goes not only for industry knowledge but also for the existing and emerging technologies that power it.
2. Finding a Way to Afford It
Making room for information technology in insurance also can be challenging because of the perception you can’t afford it. Note: we say the “perception.”
This is important because the perception may not be right at all. Too many firms get locked into an established way of doing things without performing a cost-benefit analysis on what advanced IT can bring to the table.
Many insurers are seeing the benefits of full-scale digitization. And they’re seeing it through factors such as:
- Behavioral incentives: wearable or driving sensors that log behaviors and lead to deeper discounts
- Customer communications management: to establish and manage connections that can help you grow and nurture your customer base; a big part of what we do here.
- Speeding up claims processing and settlements: does anyone remember what reporting a traffic accident was like before smartphones?
- Facial recognition: for determining risk factors in the purchasing of life insurance.
Being able to find faster and smarter ways, through technology, to lower your costs and expedite cash flow makes a tremendous impact. But to get there, you have to embrace:
3. Getting Other People on Board
Insurance industry challenges like digitization are as easy or as hard as people want to make them. Because of that, buy-in from your team is essential.
And by buy-in, we mean they’ve really got to embrace the processes and technologies that you choose to implement. That goes beyond lip service.
Team members must believe in the goal of technology, and they must educate themselves on how to use it. There’s usually going to be a learning curve with advanced, industry-specific systems.
4. Easing Tensions Throughout the Process
Insurance technology can come with a lot of moving parts. Or at least it seems that way at first.
Do your team members have the patience for it? Are they committed to the process and to helping others get on board as well?
The solutions are simple. And three-fold:
- Help team members understand the benefit
- Train together
- Empower team members who “get it” to take on leadership roles in the implementation process so they can help your strugglers
By following these steps, it becomes easier to get buy-in. And with buy-in comes real progress towards digitizing your business.
5. Data Solutions
Data solutions are important to the usefulness of insurance customer experience technology. They offer insightful analytics, easy recall of specifics, and (usually) an easy input method for capturing data.
But each of these “solutions” can be challenging before your team has fully embraced the move towards digitizing their part of the insurance industry. They need time to process it.
- What new steps will they have to take to capture that data?
- How will they read and make sense of the analytics once they’ve done so?
- How will you afford to keep up with the massive amount of storage needed to log big data over time?
These are all legitimate causes for concern. The solution is not to throw your team into the deep end of the pool. Instead, give them time to learn these processes and focus on one piece at a time until they’re ready to “flip the switch.”
6. Understanding the Full Scope
Dealing with digitization components such as document automation may not be that big of a deal. And it can be a great place to start when dipping your toe into the waters.
But as you progress, you’ll want more out of the data you’re collecting. And there often can be so much that whittling it down to the essentials becomes a full-time job in itself.
Just think about the first time you looked at a Facebook analytics report when all you wanted to know was how many people saw your posts and how many engaged. Downloading and reviewing the entire spreadsheet for just a month’s worth of data (on a busy page) is overwhelming.
The solution: understand what matters most to your organization but be willing to grow the scope as you get more comfortable with the processes and information.
7. Failing to Integrate
There are many technologies marketing themselves to the insurance industry at this time. That makes it a great time for options. Unfortunately, not all of them play very nicely with one another.
To solve this problem, don’t let yourself get too fragmented with solutions that are more about their own bottom line than the uniqueness of your operations. Either “play” with insurance tech companies that won’t force integration (preferred) or go with an all-in-one (convenient but limiting).
8. Being Regulated Into Compliance
The last challenge insurance professionals face regarding digitization is being forced into compliance. No one likes being told what to do. But regulations have a way of doing that.
There are two types of regulations. They are:
- Government regulations: the one we often think of, as established by state or federal law
- Private regulations: or consumer regulations, the unwritten rules you must follow if you want to continue to be competitive
When it comes to digitizing the insurance industry, consumers demand more convenience with virtually every product or service they purchase. So they’re going to force you to do it, and it may be before you’re mentally or financially ready for it.
The solution: start where you are. But start now.
Digitizing the Insurance Industry Is Inevitable
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