COVID-19 has accelerated the digitalisation of insurance operations

History lays witness to the resilience of humankind. For each calamity or pandemic, we have found a way out. While the COVID-19 pandemic was unfortunate, it also prompted all of us to find ways of embracing the new normal and adopt digital technologies for all practical purposes, from banking and micropayments all the way through utilities and entertainment.

While customers were increasingly getting used to personalised recommendations for films, order tracking and one-click shopping, insurance service providers found it difficult to catch up. But then, the emergence of digital offering in the insurance sector washed ashore to mark the genesis of new-gen customer engagement and operating models.

Insurance Operations Going Digital

Rana Biswas, Vice President, Wealth & Insurance Solutions APAC, Equisoft

The insurance sector did warm up to digital technologies before the COVID-19 pandemic. However, the scope of those solutions was limited to disseminating information and allowing comparison of different policies. Most of the customers would look up different policies and then connect with an agent to finalise the plan.

However, social distancing norms mandated for them to step out of said behaviour. And as a direct consequence, next-gen operating models started surfacing. For certain insurance products, too complex to be sold online, insurance agents could significantly de-clutter and expedite the entire process by using everyday applications of the new normal like Skype or Zoom Calls, eKYC and more.

However, the real breakthrough came in the form of AI-led automation, with chatbots solving customer queries in real-time and offering quick sales. With the mainstreaming of digital sales channels, customers started browsing and evaluating different policies remotely and making the final purchase by simply tapping the screens of their mobile phones.

Next-Gen insurance models are here to stay

The COVID-19 may have been a strong impetus to the digital adoption of insurance services, but the next-gen models that emerged as a consequence are here to stay long after normalcy is achieved.

Digital transformation of insurance operations has provided greater simplicity, convenience, and cost savings. The advent of chatbots, which can replicate a human-like conversation, offers quicker customer support, reduces the investment on support staff, and allows customer care agents to focus on creative or high problem-solving tasks instead of monotonously responding to the same queries. Furthermore, the workflows are optimised. As data is captured at various touchpoints, it reduces the need for manual data entry, eliminating the scope of human error.

And that’s not all! The digitalisation of insurance products clears the way for further tech-led disruption. Machine learning, Big Data Analytics, and Predictive Analytics can all be leveraged to draw in customers and facilitate big-ticket purchases.

The Road Ahead

The writing on the wall is clear: Digitalisation has seeped into the core fabric of insurance services and is here to stay. Insurers adopting digital channels not only benefit from less expenditure and increase productivity, but they can also use AI-led automation in analysing risks, better understanding customer behaviour, and propose niche offerings to different consumer segments, a trend we have already seen in the microloans and micropayments sector.

However, a digital facelift of the legacy system alone won’t suffice to make the best of this disruption. The changing times require a completely new approach, aligning the entire value chain, and implementing a truly end-to-end digital solution that will benefit all the stakeholders: insurers, distributors, advisers, and, most importantly, customers.

Author: Rana Biswas, Vice President, Wealth & Insurance Solutions APAC, Equisoft