As the industry works through the process of re-imagining itself and insurance software solutions investments continue to reach new highs, here are 5 major predictionsof trends the insurance industry will face in 2022 and beyond:
Prediction 1: Insurers who have not defined a specific enterprise-widestrategy and vision will mis-play digital transformation
Digital transformation is essential in order for insurers to remain competitive in the marketplace. But the way in which this modernization is achieved is just as important.
All organizations find themselves somewhere along the continuum of digital transformation right now. Some are engaged in modernization of aging core systems. Others are utilizing the power of APIs to address customers’ digital experience expectations. All are trying to advance their data and analytics capabilities.
But these initiatives can be complex and interconnected. Without a clear vision and well-defined plan for achieving it too much risk creeps into the critical path. Digital transformation is too big and too important to be left directionless. Along-term strategy is important in order to remain on course, focused, and intentional.
Companies need tomake a plan and decide how they want to get there. Missteps will cost timeand resources. Those who err will lose the opportunity to lead the market.
Prediction 2: Consumers will gravitate toward insurers that create a smoothcustomer experience
We’re in the era of on-demand TV shows, same-day delivery, and virtual medicine, and if your customers are more digital than you are – you have a problem.
Customer expectations have already skyrocketed and will only continue to rise. This means consumers will walk away from insurers who continue to create obstacles to the buying process. This includes those who still have manual processes for parameds, signatures and policy changes.
If companies fail to fill the gaps between automized and manual processes, eventually consumers will begin to walk away. Insurers that don’t iron out their customer experience issues in the digital world are going to be left behind.
A great example of this is the ongoing adoption of policy administration software, without a holistic, strategic plan. In an attempt to jump on the bandwagon, many companies have resorted to digital portals. However, in most cases these eApp solutions only cover the first step in the process, which creates a rocky customer experience. For example, people will access the portal and start answering questions, only to realize that they don’t qualify. Next thing they know, legacy processes kick in they find themselves receiving mail, emails, and phone calls as the insurer tries to gather more information and schedule medicals. What began as a seamless, digital experience, turned into a very poor customer experience.
Prediction 3: Technical debt will catch up to insurers who choose “band-aid” insurance software solutions over strategic modernization
Technical debt will catch up to insurers who continue to kick the legacy technology can down the road and insist on patching and upgrading existing systems rather than modernizing the foundations of their IT platform.
Companies that have not yet chosen to invest the necessary time, money, and resources towards modernizing their insurance legacy systems, are simply trying to patch up their legacy systems to keep them going. This causes technical debt – a gap between what their systems are doing and what they need to be doing to remain competitive.
Unless companies strategically modernize their insurance legacy systems, they are going to become obsolete. These companies will not be able to run their digital sales and data analytics like other companies can. At the end of the day, advisors and customers are going to choose to partner with companies that are doing a good job, have modernized, and are digitally capable.
Prediction 4: Rushing digital transformation will do more harm than good
Insurers are increasingly dependent on emerging technologies and data sources to drive efficiency, enhance cybersecurity, and expand capabilities across the organization. However, most should also focus on improving the customer experience by both streamlining processes throughautomation as well as providing customized service where needed and preferred.
Insurers need to find ways to balance technology adoption while maintaining the human touch – an essential aspect of business in the industry. This means insurers need to find the sweet spot between digitalization and human connection. The rush to digital transformation will hurt more than help if advisors are not integrated into every aspect of the change.
Advisors are still the primary way insurers make sales because advisors have empathy and the ability to build relationships. They can handhold and educate customers and are much more likely to make sales and retain customers than a new digital interface. If attention isn’t placed on the advisor as well as the technology, all the resources and energy placed into digital transformation will go to waste.
Prediction 5: Companies that don’t make strong solution partnerships will lag behind
Strong partnerships are key to succeeding in the insurance industry. It’s important to create partnerships with innovators in order to focus on your core successful product offering like insurance agency management system, and not get sidelined with areas outside your expertise.
Companies that choose to build proprietary solutions in-house or who make poor choices when partnering with vendors will fall behind. They will not be able to compete with those whose architecture supports strong webs of partners and leverage each organizations’ world-class expertise into a dominant ecosystem.
The industry is growing – who will come out on top?
The pandemic has rapidly accelerated the pace of change within the insurance industry. Those who can adapt will come out on top – leaving laggards to fall behind and fall apart. Successful navigation of very complex digital transformation journeys requires a long-term vision, careful planning and identification of the best vendors and solutions to accelerate implementation.
