Four ways insurers can leverage technology to differentiate themselves

• Most insurers struggle to upgrade legacy technology to satisfy industry and consumer expectations, even when they are ready for digital transformation.
• Those who innovate to satisfy the identified needs of their consumers will have a competitive advantage in the marketplace.

The expectations of insurance clients have been altered by aggregator websites, telematics, and mobile apps.

In the past few decades, technology has drastically transformed the manner in which we purchase products and services, including insurance.

Previously, purchasing insurance required an in-person meeting with a brokerage. However, as the world evolved, insurers began selling directly to consumers, and with the emergence of the internet, it became possible to purchase insurance online.

Shortly afterward, aggregators appeared, and it became possible to obtain several quotes simultaneously. Smart mobile devices enabled consumers to directly engage with insurers via a pocket-sized app, and the digital revolution continues to this day.

The UAE continues to be the largest insurance market in the GCC, accounting for 43.7 per cent of the region’s gross written premiums (GWP) in 2020, with Saudi Arabia following closely with Saudi Arabia in close second with a ranking of 39.1 per cent share of the GWP.

Moreover, the UAE’s insurance premiums are expected to grow at an annual growth rate of 4.1 per cent between 2021-26. Expansion of compulsory business lines, growing standards of regulation, the growth of digitisation initiatives by insurers as well as favourable immigration policies are likely to support its growth.

Although it can be challenging to keep up with the rapid evolution of technology and customer expectations in today’s highly interconnected world, there are several ways insurers can leverage technology to better meet customer expectations and differentiate themselves from their competitors. 

Focus on customer experience

Providing a more unified and streamlined client experience is one of the most important differentiators today. In order to accomplish this effectively, insurance firms will need to implement the appropriate technological systems.

We have discovered, however, that many insurers are still utilizing legacy technologies, resulting in a significant amount of inefficient processes occurring behind the scenes. This results in a frustratingly slow experience for customers.

According to Endava’s report, “Top Trends That Will Underpin Digital Acceleration in Insurance,” most insurers struggle to upgrade legacy technology to satisfy industry and consumer expectations, even when they are ready for digital transformation.

Modernisation enables firms to examine the end-to-end user journey and design or update legacy systems with the customer experience at the core. While many insurers are still focused on their products, a customer-centric approach can help differentiate their offers.

Collecting the appropriate data

Data is essential to delivering a superior client experience. This implies that insurers must not only acquire the appropriate data, but also utilise it throughout the crucial stages of the customer’s journey.

As per the report, insurers must first comprehend the data they are already gathering, the new data they need to collect, how to collect it, and how it can be used to their benefit.

Data needs to be accessible from a central location in order to be utilised when required, which may demand the implementation of new technologies.

While other insurers might struggle to comprehend the data they possess, having a centralised data source may give you the advantage of being light-years ahead of them in terms of utilizing it to improve the customer journey.

Individualisation throughout the journey

Once firms have their data collection and utilisation in order, they can then use it to personalise their customer journey. 

With this granular data, insurers can begin using AI or predictive analytics to deliver products catered to their customer’s needs, quotes that are competitive not just in price, but in overall coverage, and a claims journey that is straightforward and efficient.

Personalisation across the client experience increases customer satisfaction and reduces customer loss, helping insurers stand out from their competitors during the customer journey.

The vast amount of data required for efficient AI and predictive analytics may need a reevaluation of how data is stored and utilised.

In legacy systems, data is often fragmented and siloed in the different departments due to the system’s inability to consolidate information.  Insurers can reap the benefits of AI and Analytics by making changes to their data strategy.

Using innovation as a differentiator

Another advantage of advancements such as AI and machine learning is that they enable more sophisticated and valuable data utilisation as well as the development of predictive algorithms.

These algorithms have the potential to be commodified and used to provide insight into consumer behaviour and potential risk, insurers can then leverage this insight to identify the actual, genuine needs of present and prospective clients, allowing them to develop innovative products to meet these needs.

 Insurers who innovate to satisfy the identified needs of their consumers will have a competitive advantage in the marketplace.

The constant evolution of technology has created substantial opportunities for insurers seeking to stand apart. By streamlining and personalizing the customer journey and using data to their advantage, insurers can enhance the customer experience and maintain their competitiveness in a market that is constantly evolving.

• The writer Nick Curran is the Head of Endava MENA.