Digitization in the Insurance Sector

The gradual dynamics of unprecedented structural changes and profound technological advancement has seemingly paved way for multiple linkages and affiliation across markets. It’s a no brainer that global connectivity thus far has been propelled by the uptake of digital solutions brought about by technology innovations. As writer and inventor Arthur C. Clarke once said, ‘Any sufficiently advanced technology is indistinguishable from magic.’ True to this word, digital solutions have time and time again proved their wonder in our day-to-day systems. From AI driven algorithms, the Internet of Things devices, robotics and machine learning infrastructures, the convenience offered by digital solutions are getting entrenched in our lives, reshaping business models and revolutionizing product/service demand and supply dynamics and relationships in sectors such as insurance, banking and retail.

Customer experience in the insurance sector is considered an important metric in assessing the quality of services offered in the market. For the longest time, insurance service providers have been considered slow, bureaucratic and at times cunning when handling customers’ requests at various stages of service delivery. This can be partly attributed to over-reliance on legacy systems and failure to promptly launch products that address and satisfy the ever changing risk environment. The insurance sector value chain comprises of three stages. The first stage is business development. Here prospective clients seek the two cents of an insurance company representative on potential product/s that will solve their problem/s. The second stage is the underwriting or risk assessment process. In this stage, the insurance service provider assesses the client’s requests and determines whether to accept or decline it and if the request is accepted, at what price will it be charged. The last stage is the claims process. This is where the rubber meets the road and poses a significant threat to the relationship between the service provider and the client because it involves the client requesting compensation for an unfortunate event that has been caused by the risk insured and the service provider has to ascertain that the request is legit and meets the merit. Throughout this value chain, factors such as speed of service delivery, transparency, legitimacy and trust are constantly being tested and this is where digital solutions can prevail.

The intervention and adoption of digital technology in the insurance sector can promote and ensure a seamless and revitalized customer experience. Developing centralized databases can allow customers access information about products and quotations at the click of a button and in the nick of time. In addition, adopting artificial intelligence can not only strengthen the relationship between the client and service provider but also eliminate or drastically reduce fraudulent cases that emerge during the claims process. Continuous micro and macro data collection and analysis can support the sector’s innovation efforts and lead to exciting, futuristic and modern products.

With the power to streamline insurance functions, the need for speed will undoubtedly propel the industry into an era of unlimited possibilities. In the fullness of time, it will be imminent that digital solutions in the insurance sector not only act as a quick fix but significantly drive customer experience, innovation and growth, one policy at a time!

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