Nine reasons insurers who invest in insurtech will always win in a competitive market

Insurtech has been transforming the insurance game for more than a decade.

It’s time for the rest of the players to take stock of their pace and either concede defeat or step up to the plate.

By Martin Stewart

While this may sound drastic, the last few years have seen companies put the proverbial foot on the accelerator in terms of their digital agendas. Where transformation may otherwise have been a gradual process, COVID-19 has made it nothing short of a priority. According to KPMG, it was actually the digital nudge many insurers so sorely needed.

When it came to the influence coronavirus has had on chasing automation, no less than 85% of insurance company CEOs admitted to it having fast-tracked the digitalisation of their operations and processes, while 78% said it’s supercharged their move towards a more seamless experience for their users.

Needless to say, while the front runners are forging ahead, the race isn’t over. Here are nine reasons to support your business case for investing in digital as a priority.

1. Better self-service capabilities

Customers are more demanding than ever. When they want things, they want them now. The same goes for solutions. They don’t want to waste time navigating IVR menus—they want an instant resolution. Or, at least, instant access to support. That’s where self-service capabilities can do wonders for customer satisfaction. Better yet, it can do wonders for your customer support costs. If customers are servicing themselves, you’re outsourcing the work and pocketing the cost of call centre staff and support agents.

2. Full visibility of impacts and results

As the renowned management consultant Peter Drucker once said, “If you can’t measure it, you can’t manage it”. This is very much the case with business. After all, how do you know something’s working if you don’t have full visibility over its consequent impact and results? That’s where manual systems can be a real gamble. Intuitive technology, on the other hand, can generate a wealth of data around your business processes. This can in turn provide a deep analysis and precise measurement of the impact each small change makes, from strike rates and turnaround times to staff productivity and customer satisfaction. In essence, having the right tech in place can create a continuous improvement cycle.

3. A more rapid response

Just as the demand for digital self-service has grown, so too has the desire for rapid responses. So, it’s no surprise that the most important attribute of the customer experience is a fast response time. It’s also just as valuable for your business as it is for your customers, from the efficiency gains of straight through processing, to the ability to rapidly respond to changing market conditions, like applying an embargo on areas in the path of a potential cyclone—within minutes. A fully digital system can also allow you to roll out new campaigns in moments, the same goes for changes to premium rates and formulas

4. Far-reaching progress

The benefits of digital transformation can extend far beyond the internal processes themselves, allowing insurers to reap the rewards of intelligent technology, from claims procedures to logistics. For example, realising the benefit of reduced infrastructure costs by relocating systems to the cloud. Modern tech architecture also enables you to quickly plug into your preferred specialist third-party suppliers, such as payment gateways, ID verification, address validation, credit reference, etc., without the need for bespoke integration, or worse, trying to build those services yourself.

5. Enhanced network security

Insurers who embrace a digital evolution will benefit from improved security and a more resilient network. For example, major cloud providers can provide a full service connecting companies with the latest and continually updated security technology, as well as access to scalable infrastructure, and backup and disaster recovery options.

6. Talent attraction and retention

A business that pursues modern technology will be better positioned to retain capable employees and attract fresh talent. The eradication of labour-intensive processes will boost job satisfaction, while the continuous implementation of new innovations will boost your company’s profile in the job market.

7. Higher investment appeal

Riding the wave of digital transformation won’t only make your company an appealing place to work, but an appealing prospect for future investors. The investment itself says you’re signing up for a powerful initiative that’ll positively support your customers and employees. Put simply, you’re creating a culture of innovation that in turn breeds success. Listed insurance companies with fully digital cloud technology get much higher multiples than traditional insurers. For example, Lemonade trades at over 18 times revenue. IAG and QBE at around 1.2 and 1.8.

8. Timely tech adoption

The sooner you take that first step towards a digital future, the closer you get to leading it. By delaying adoption, you risk falling behind the point of catching up. In an already competitive market, you can’t afford to lose pace. Just look at Amazon, Google and Tesla—they’ve made leaps and bounds in their respective industries. So much so that it’s been impossible for the likes of Angus & Robertson, Yahoo, and General Motors (Holden) to keep up.

9. Cost reduction

Modern technology is at least ten times more productive than old technology allowing a smaller team to generate more work. Utilising technology to automate or eliminate many administrative tasks allows staff to be re-directed to revenue generating activities. Hosted services cost less than internally hosted, both in terms of up-front investment and TCO as systems age and new infrastructure is required.

It goes without saying that there’s an increasing rate of digital transformation within the insurance industry. But for the same reason you don’t bring a knife to a gunfight, the only way you’re going to go into battle with a tech savvy insurer and come out unscathed is to become a tech savvy insurer yourself. If a competitor has more adaptable and progressive technology, they’ll always have an edge.

You see, as more and more companies adopt new technology, the disparity between digital and analogue players widens, reaching the point where it becomes too late to a make a move. Here’s where having the right insurtech partner by your side can keep you leading the pack in the insurance game.

Whether you’re looking for an innovative platform to support business growth, you’re over capacity and need to outsource a project, or you’re in a jam and need a rapid solution, Axe is ready to support you.