Let’s be honest: insurance isn’t an industry known for speed. It can be hard to keep pace with digital innovation while keeping a focus on growing your client base. Not only is technology constantly evolving—it’s expensive to purchase, maintain, and implement within a company’s existing processes. One solution is insurance technology, or InsurTech for short.
What is Insurance Technology?
InsurTech refers to “technology innovations designed to squeeze out savings from the current insurance industry model,” according to Investopedia. Emerging in response to slow, manual processes and opportunities for an improved policyholder experience, the primary focus of most insurance technology tools is to enhance collaboration for improved efficiency.
Many InsurTech tools focus on cloud technologies for policy management, processing, and storing critical information securely. Currently, 7 out of 10 insurance carriers are using cloud technologies as a key part of their business processes, with 26% of insurers boasting fully deployed cloud claims systems as of 2018—roughly double the number from 2016. Simply put, InsurTech cloud services are no longer an option; they’re rapidly becoming the norm.
InsurTech for Customer Experience
As we launch into a new decade, insurance customers continue to expect quick, consistent service regardless of the channel they use to reach out for help. By offering digital options for claims management and processing, insurance businesses can see up to a 20% increase in customer satisfaction, according to McKinsey—plus the added benefit of reducing claims expenses by as much as 30%.
Insurance technology also allows you to go beyond simply meeting customer demands, and move toward anticipating needs and exceeding expectations. As technology evolves and digital interactions give insurance businesses unique access to customer demographic data (with permission, of course), there’s a chance to better understand your customer’s needs. According to Accenture, 84% of insurance executives view digital demographics as a way to identify unmet customer needs.
InsurTech for Business Process Improvement
Inefficiency costs companies anywhere from 20% to 30% of their revenue every year, according to research firm IDC. Insurance businesses are no exception to this rule. While the largest insurance companies are the biggest offenders on inefficiency waste, many are reluctant to accept automation, cloud services, and BPO services into their business processes—only 6% of large commercial insurers have mastered underwriting automation.
In large part, this is due to bureaucratic paralysis and a general reluctance to change. Many insurance providers are concerned that InsurTech may hurt their business or disrupt the market. The reality, according to McKinsey, is that 63% of commercial InsurTech services are focused on partnering with the industry as it exists and enabling improvement, while only 9% aim to disrupt the market.
Rather than attempting to roll everything out at once, it might make sense to bring digitization to specific portions of your business processes. For instance, certificate delivery and storage can be enhanced with block chain technology and cloud technology. Rather than manually generating certificates and sending them through physical mail (risking loss or theft) or email (risking a data breach), InsurTech makes it possible to securely generate, deliver, and store certificates for everyone in your insurance ecosystem who needs them.
InsurTech as a Recruiting and Hiring Incentive
Insurance technology doesn’t just help improve customer experience—it also plays a critical role in the employee experience. Overall, 76% of insurance executives say their employees are more digitally mature than their organization, resulting in a workforce that’s “waiting” for employers to catch up. As the insurance industry continues to see historically low unemployment, it can be difficult to hire and retain experienced insurance talent.
If your business is languishing in inefficient processes, it can contribute to lower employee morale. Frustration with inefficiencies in their day-to-day work can be a major contributing factor to reduced employee satisfaction. If your business is able to offer improved processes and better technology, not only will you be able to retain your current workforce, but you could potentially attract new talent currently frustrated by inefficiencies and manual processes in their current jobs.
Choosing Your InsurTech Partner
Patra is dedicated to developing InsurTech innovations that lead the way for insurance business growth. With more than 20 management systems supported and over four million certificates delivered, our insurance outsourcing company has the experience and knowledge to accelerate your business growth as an InsurTech developer and BPO partner. Contact us today to learn how highly configurable, scalable InsurTech can help your business scale at the speed of technology.