There's a famous quote, "the only constant in life is change." Basically, it means that the one thing we can all count on is that things are always going to be changing.
Nowhere is that more true than in the world of business. And, it's been especially true over the past year and a half. The COVID-19 pandemic is still leaving its mark on almost every industry around the globe. And, nowhere is that more true than the health insurance industry.
The future of the insurance industry, like many others, is facing a lot of changes and uncertainty. The key to any industry surviving in the future is the ability to predict, and plan for, the changes that are coming.
That's exactly what we're going to talk about today. We'll cover what customers are dealing with in the new modern landscape of insurance. We'll talk about what customers expect, what innovations are helping industry leaders meet those needs, and how to manage change.
We'll even cover some of the problems modern technology causes, and solves in the industry. Read on and you'll know everything there is to know about the future of the insurance industry.
As the way insurance companies conduct business changes, what customers expect also changes. The digital experience creates a new definition of what customer satisfaction is. The future of the insurance industry will revolve around a new level of customer service.
But, what do customers want in the modern age? Insurance companies are being compared to the Googles and Amazons of the world. People want that same "Google or Amazon ease" when it comes to dealing with companies in all facets of their life.
What Google and Amazon have done for internet search and shopping, Tesla has also done for cars. People can order their cars online and just go pick them up at their local Tesla dealer. They can even sit back and relax in a Tesla car that drives itself.
What does this mean for the insurance industry? It means that the leaders in the insurance sector need to band together and figure out how to leverage technology to meet current consumer demands. Insurance companies will have to seek out new partnerships and other opportunities to increase market share, as well as create new product opportunities.
Ultimately, insurance companies need to explore new, innovative ways to meet customer's insurance needs and enhance the overall customer experience. We have to figure out a way to offer insurance services that help clients live their lives better.
The Technology of The Future
The use of AI technology can help customers make better insurance buying decisions. AI helps smooth out the "customer journey" when purchasing insurance products and services. AI gives insurance companies unparalleled insight into each customer's individual needs.
The result is a more customizable, efficient insurance product for every consumer.
New and Cutting Edge Innovations
We know we need to innovate as an industry to keep up with the speed of the global economy. But, what do those changes and innovations look like?
Innovations within the insurance industry need to happen. It's the only way the industry will be able to keep up. Providers need technology that can adapt to the needs of their customers. Insurance providers need to innovate to keep their competitive edge.
It's one of the biggest challenges facing the insurance industry in 2021.
Recently, many insurance providers and carriers have been stepping up to bat. Companies are employing the use of revolutionary technologies like AI and predictive analytics to help reshape the future of the insurance industry.
Insurtech is capable of responding to customer needs while lowering operating costs for providers. Insurtech's cutting-edge technology can aid with the development of new insurance products. These products can respond to emerging risk while offering customers customizable coverage and pricing options.
The use of blockchain technology is still new in the insurance industry. But, industry leaders are optimistic about how it can change the insurance landscape. By employing blockchain technology, customers can expect enhanced efficiency and faster claims processing.
Insurance providers will also benefit from the blockchain. They'll be able to provide consumers with a new level of trust in their products and services. The new technology will also help providers and customers avoid fraud through advanced fraud detection and prevention features.
Risk of Cyberattacks: The Importance of Cybersecurity
The health insurance industry, and insurance in general, face the risk of cyberattacks. Innovative technology in the digital age doesn't come without a price. That price is customers and insurance providers need to be vigilant of their online data.
The health insurance industry's main concern is the loss of confidential data. Patient data is private and there are laws in place protecting patient information. In addition to data breaches, insurance companies deal with automated threats, reputational damage, and there have even been cases of cyber extortion.
Insurance is an industry that relies on trust and reputation. Data breaches, disruptions of business, and other cyberattacks can damage a company's reputation very quickly. Years of great service and customer relationships can be gone in an instant.
This is why cybersecurity is more important now than ever. We are in a digital age and there's no going back. The Internet of Things and cloud computing are vulnerable.
Becoming more digital means that cyberattacks are likely to increase. Unfortunately, there's no way around it. Insurance companies need to protect customer data in a compliant and reliable way.
What can insurance companies do, specifically, to prevent cyberattacks? Well, the first step is evaluating where you're protection capabilities currently stand.
Companies should do whatever they can to test their system. Putting the system under pressure is the best way to see if it can withstand highly targeted, sophisticated attacks. If this is a new concept for you and your team, you may want to consider hiring a cyber-security firm to help with implementation.
The next measure companies can take is to make cybersecurity a company-wide initiative. Everyone being on the same page to protect your company's system is one of the best ways to reduce human error. And, human error is one of the biggest causes of vulnerabilities in a cybersecurity network.
Another step is for your team to invest in the early detection of threats. Insurance companies should constantly be innovating to keep up with hackers and cyber attackers. Quick detection allows your team to identify the threat and neutralize it before it becomes a bigger problem than it needs to be.
This step is where insurance providers need to invest in technology. There are plenty of software options on the market that specialize in threat detection and neutralization.
Finally, insurance providers need to learn from the past and update their systems. Analyze threats and attacks that have happened in the past to learn from that data moving forward.
The Anticipated Decrease in Quality Talent
Insurance companies are continuing to leverage technology to provide the best customer experience possible. While this is great news for the customer, innovations like AI and machine learning are beginning to replace some of the workforce in the insurance sector.
However, technology can't replace every job within the insurance industry. Customers want the speed and ease of modern technology, but still also want the personal touch of human interaction. But, the challenge remains that where there are people there is still technology.
This is beginning to create a talent gap in the industry as smarter, more sophisticated employees are needed to keep up with technology trends. Employees need to be trained on how to use technology platforms. Companies also need to make sure employees will be on board with new technologies and not resist change.
Many experts believe that technology won't fill the talent gap, per se. Leading companies are leveraging technology to free up their "human capital". They prefer to have machines doing the mundane tasks while freeing up their team members to handle the more face-to-face, high-level stuff.
A study was done by Deloitte outlining the talent gap problem within the insurance sector. The data collected offers some great insights into the declining talent pool, employee retention, and what to expect with employees in the future.
Achieving Better User Experience Through Data Analytics
With all of the technology around us, it's no surprise that we're living in an information economy. Data is king. And that goes for whatever industry you're in, including the insurance sector.
According to a study done by Applied Analytics, 90% of the world's data has been created in the past two years. Talk about exponential growth. That number only stands to go up as time goes on.
In the insurance industry, data is powerful in gaining a deeper understanding from both the provider and customer sides.
Insurance providers can use data insights to help their brokerages run more efficiently and serve more clients. Management can leverage data to improve employee productivity and strengthen client and carrier relationships.
Data analysts within the industry are constantly running numbers to help reshape the products and services insurance professionals can provide. Customer data is analyzed to see which products best fit each customer. Those insights may also be used to decide which products need an update or which ones need to be removed from circulation completely.
Analysts also help determine the scope of coverage. Modern data can be used to help update actuarial tables that are key in how much compensation an insurance company provides. This helps insurance companies to provide the financial help customers need in the most efficient way possible.
For more fascinating information on what data is doing to revolutionize the insurance industry, take a look at the Applied Analytics study mentioned above.
The Speed of Change and How to Manage It
With so many changes happening throughout the insurance industry, it can feel like you're constantly left behind. New products, new technology, and new software systems are changing the business every day. As a result, companies are left asking the question "how do we keep up?"
One of the biggest changes has been an emphasis on customer experience. There's also a growing number of insurance companies that are leveraging modern technology to do so.
In addition, customers are demanding a more "emotional" experience when they purchase their insurance products. Customers are no longer interested in the cold, automatic process of filling out a quote form and then buying your insurance products online.
New and Old Collide
Customers want to know their agent. Their agent should really get to know them and their families.
Insurance is moving toward a really fascinating hybrid of technology and the personal touch.
Insurance providers also need to increase their speed of change when it comes to bringing new products to market and adopting new technologies. If you're too slow to do either of these things, your insurance firm could be left in the dust. However, on a larger scale, experts believe the pace of change is a marathon.
As an insurance professional, you still need to be fast. Especially when bringing products to market, processing claims, and meeting your customers' needs. But, the pace of change also requires a slow, deliberate touch.
Customers want you to take the time to establish a relationship. Really get to know them and their needs. Taking the time to establish a deeper relationship allows you to do your job as an insurance professional, supporting their families and protecting their property.
Insurance Industry to Infinity and Beyond
The future of the insurance industry is exciting! It's a unique sector of the business world where a marriage between new technology and older relation-based business approaches is occurring.
Insurdinary is there to help you every step of the way when it comes to navigating this new landscape. If you have any insurance-related questions, you can reach out to us anytime. Browse the resources in our company blog to get all of the latest insurance industry info and trends.