The pandemic put a tremendous strain on many industries, but insurers especially have seen the human cost of COVID-19 up close. Helping clients navigate disability, the loss of loved ones, and the unintended consequences of delayed medical care have led to many industry leaders wondering how to do better in the face of a crisis.
Some have also begun to question the industry’s reputation for being too cautious and reluctant to change. While powerful digital tools have proliferated in other industries, insurers have not always taken advantage of these technologies. Unfortunately, that means they are doing less than they could to serve customers, improve efficiency, and keep data secure.
The insurance industry is ripe for digital transformation
In August of 2020, the Association for Cooperative Operations Research and Development (ACORD) found that fewer than 30% of insurers had digitized the value chain. In other words, despite the preponderance of digital technologies, the vast majority of insurers had not done much to adopt them.
But the industry may also get less credit than it’s due. While there may not be many true “digital innovators” in the sector, it’s not as if insurers have completely ignored digital capabilities. Many are somewhere in the middle, relying on digital tools for some operations and legacy systems and processes for others.
Such lackluster movement might not have seemed like such a big deal in the past. After the intensity of the past two years, though, it’s well past time to re-evaluate how things might be improved.
Cybersecurity threats and the insurance industry
Last year, a ransomware attack against CNA Financial sent a shockwave through the industry. The fact that one of the largest insurers in the country could be forced to pay out $40 million in ransom was a grave reminder of how vulnerable even the biggest companies are.
For insurers using and maintaining legacy systems, those cybersecurity risks could be even greater, and may be putting client data at risk. These older systems simply aren’t up to the task of keeping information secure, and often have known vulnerabilities. That’s what makes digital transformation such an urgent concern. By moving away from legacy systems and into the cloud, insurers can better protect both their businesses and the clients they serve.
Digital transformation and the customer experience
So far we’ve been talking about some pretty scary stuff, but digital transformation is about a lot more than mitigating risks. It’s also about improving the way you serve customers.
More than ever, your customers choose who they do business with based on the experiences they have. You can earn their loyalty by providing them with personal, empathetic service that treats them as individuals, and that’s where digital transformation offers a huge competitive advantage.
Digital transformation puts customer data at your fingertips. You can analyze the information you have to create the human-centered experiences your customers want. You can even track interactions to see how people respond to different approaches. When it comes to providing the level of service that will keep your customers coming back, there’s no better place to start than investing in digital transformation.
Improving efficiency through digital transformation
Lost time is lost money, but if you don’t have a clear view into what your business is doing it can be hard to spot the inefficiencies that are slowing you down. The wonderful thing about digital transformation is that it can help you identify patterns much faster, collating information to reveal which processes are working and which processes aren’t.
That increased efficiency is good for your business, and it’s even better for your customers. For an industry in which customer experience is key, digital transformation offers a way to get the edge over your competitors. But it requires a people-focused approach to technology.
We take a human-centered approach to digital transformation.