Digital transformation of insurance companies, insurance products and services
Increasing digital transformation can be found in all walks of life and is of great importance to the insurance industry. Customer behaviour, needs and demands have changed fundamentally. The internet generation, who are now in their 30s, have long since stopped thinking about what digitalisation actually is, and are instead using it directly. They are used to communicating and shopping with smartphones. They also prefer to communicate with insurers through them. This effect is also known as digital transformation.
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If members of this ‘digital’ generation are interested in insurance products, they search the information on the web via consumer and advice websites, consult relevant blogs and look for the best deals on comparison websites. Finally, they conclude the contract online, for example via an insurance app they have downloaded on their smartphone.
In general, laws regulate insurance products to protect the interests of customers. They ensure that customers are adequately informed about the terms and protection offered by a particular insurance product.
What is digital literacy and digitalisation in insurance
Digital literacy is becoming an essential factor when it comes to insurance companies. These companies have to adapt insurance services to the reality that an increasing number of customers are digitally literate and therefore prefer digital services. The generation that asked questions like what is digitalisation or what is digital technology is being replaced by a new age of customers. And that is what we need to adapt to.
In addition to digitalisation, there is another challenge to be overcome. Small and agile insurance companies are moving into the insurance market with innovative ideas and concepts. They are finding new and exclusive approaches to customers and in the process putting pressure on the huge sales structures of insurers.
The age of the customer has begun
Customers are becoming more and more demanding. They expect insurers to provide the same convenient and easy experience they know from online shopping, as well as the ability to quickly compare prices, services and products of all kinds. Information, advice, contracting, claims reporting or contract management – all contract management should be available 24/7 in digital form. For this reason, the insurance industry’s understanding of changing customer needs and behaviours, as well as how to adapt products and processes accordingly, is crucial. Caution in the online space should not be forgotten either. Companies must do everything they can to ensure digital security.
What is digital transformation in the insurance industry: IT is becoming the core
Digital insurers need to maintain digital ecosystems, build digital insurance products and services. To be successful, they need to automate all processes extensively – the information technology and systems used to develop, distribute and test insurance products need to work as smoothly as in a factory. Every insurance analyst and digital insurer relies on processes built specifically for the internet – 100% seamless, with no wait times, automated and equipped with powerful analytics and artificial intelligence capabilities.
Essentially, this means that the insurer’s business model is primarily an IT issue. This applies to all areas and does not depend on the market in which the insurer operates. The potential and opportunities associated with digital transformation, such as sales, communication channels, customer relations or collaboration platforms, can only be fully exploited with a modern IT infrastructure.
Data – the source of 21st century
The same goes for another important topic that dominates the headlines in relation to digitalisation – big data. Data is often referred to as the new oil. This means that it is one of the most important raw materials and acts as a fuel for entire value chains, industries and economies. It is no coincidence that Google, for example, has surpassed the stock market value of many traditional businesses, demonstrating how desirable data-driven companies are to investors.
In keeping with that metaphor, analytical information systems are often referred to as refineries that refine valuable raw material and generate information and insights from data. The insurance market has a vast amount of data on customers, products, claims trends and so on. Using intelligent analytical processes and proven algorithms specific to the digital insurance industry, these huge data sets can be structured and evaluated in a meaningful way.
The information gathered provides valuable insights for the company. This means more than just predicting general trends and developments. It also means having a 360-degree view of the customer. This knowledge is invaluable to all areas of the insurance industry – from product development, marketing and sales activities, pricing to value-driven corporate governance. Overall, data analytics can be used to minimise business risks and improve products and services.
Be successful with an experienced partner by your side
Digital transformation in the insurance industry is transforming IT into the cornerstone of a successful insurance company. With msg life , insurers have a partner with global experience by their side. We understand that IT and data are the keys to success and that customers today have different expectations of their insurers than they had before. Digitalisation, as we understand it, means streamlining and automating processes, taking into account trends and the desire for greater flexibility in product development and, not least, to stay close to the customer. This means that insurance data must be mobile and constantly accessible.
With our comprehensive solution msg.Insurance Suite, digital transformation works immediately after deployment. Our innovative, comprehensive, component-based system offers continuous digital processing of core business processes in all segments: from life and health insurance to property and casualty insurance – for the entire insurance sales process. For example, the contract management system for life insurance msg.Life Factory enables fast product implementation and efficient processing of all business processes.
The solution supports not only traditional business models, but also new digital forms of insurance through B2C sales on the portal. With our portal solution msg.Online Insure, insurance company customers can manage almost all relevant aspects of their insurance policies themselves. Easy-to-understand technologies actively engage customers in business processes – correspondence between the insurer and the end customer is conducted exclusively digitally. In addition, dealers and other partners can also be involved in the communication with the customer.
Standard software msg.Ilis which is also integrated into the complete msg.Insurance Suite solution, offers an ideal starting point for analysing large amounts of data. The integrated solution also includes insurance migration, which is a comprehensive expertise in insurance contract migration (including all data between systems). Software msg.Ilis provides a framework for a central analytics solution that makes projections, analyses and other available. The solution also includes a cluster-based portfolio compression method.
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