Current Tech Trends Change the Way Insurance Providers Do Business
In the current market, insurers need to be quick on their feet and able to transform at scale. Many standard decades-old insurance mainframes that were once considered valuable can now prove caustic to evolving business objectives. Insurers must be aware of adjusting processes to meet the changing demands of their customers, living up to their expectations for a more modern, digitally accessible, and fast experience.
Louise Penny, author of Still Life, wrote: “Life is change. If you aren’t growing and evolving, you’re standing still, and the rest of the world is surging ahead.”
Insurance agencies would be wise to heed Penny’s words at the behest of their customers. The industry is screaming for a makeover, and it’s high time we responded, offering the insurance sector a fresh start with “improved organizational and technological performance, enhanced customer and employee experiences, and accelerated time to market new ideas and offerings” (Microsoft, 2023).
Tech trends won’t just change how you do business but may also determine if you get to keep doing business at all if you decide to forgo improvement.
Roadblocks to Modernization
Insurers largely depend on legacy systems that no longer serve them or their consumers. These systems, consisting of outdated, stagnant, and underwhelming architecture, have taken the industry as far as it can go. Without transformation, insurance organizations risk falling behind and becoming obsolete.
Loyalty is shifting, with some jumping ship to chase after more tech-savvy organizations that have fully embraced the future. The fiercest competitors in the insurance industry have listened to the word on the street and are acting on it, recognizing that digitization, AI, and on-demand services are all the rage in our modern day.
Meanwhile, those insurers that missed the boat are now scrambling to retain customers at the final hour. The problem is the longer they wait, the harder the transition gets.
Addressing digital roadblocks is the key to successful modernization, with one glaring truth being the fact that making a few changes here and there won’t cut it. The first major obstacle to consider is that insurers will need to completely overhaul the legacy systems heavily used by insurers, including mainframe technologies like COBOL, and RPG applications.
What that equates to for insurance companies still using outdated methods and already struggling to keep their businesses afloat is not only a sizeable dent in their pocketbooks but also a hefty time commitment to overcome the complexity of a full-fledged upgrade.
Add to that a workforce lacking the necessary skills to carry out the pointed move, and you may be looking down a rather bleak path. When not appropriately strategized and handled adequately, taking on a project of this magnitude can prove treacherous to the continued churning of daily business operations.
Though, at this stage in the game, the staunch reality is it’s also essentially a non-negotiable issue. In other words, a short-term “blip” to play catch-up at this stage could have long-term payoffs that will ultimately help your business thrive. On the flip side, sticking to familiarity and non-disruption in the present will only help solidify your company’s demise in the not-so-distant future.
Why It’s Important to Embrace Change
Change is inevitable. If you’re growing, you’re changing. So, what happens when companies refuse to change with the times?
Customer retention can’t be ignored as the primary driving force behind infrastructure modernization. Why do business if not for gain?
Catering to your target audience means more money in the long term, and everyone’s hoping to make a profit while providing their faithful followers with just enough above and beyond all the rest to keep them hanging in there with them. But if they’re changing and you’re not, you risk them moving on without you.
The businesses that adopt the newest tech gadgets usually take the win as our world becomes increasingly fast-paced and remote. People today need to be momentarily distracted from the busyness of the daily grind. Therefore, it’s important to effectively attract them to the next idea, brand, product, company, etc. to achieve continued engagement.
The current climate is highly “in your face,” with the mind continually processing more data than we realize. Daily, 2.5 quintillion bytes of data are created, flooding our connected devices and infiltrating our senses. With the Internet of Things (IoT) beginning to take off around the time that study was conducted several years ago, it’s likely that number is now grossly under representative of the amount of data generated and distributed today.
Looking at the numbers, it’s clear people rely heavily on smartphones, data, and apps. The average smartphone user has access to 80+ apps, according to 2019 research, and these apps account for nearly 90% of all cellphone usage, meaning people live on their phones and digital devices.
In 2020, 218 billion mobile apps were downloaded onto consumers’ devices, showing a 6.86% increase from the prior year. Following the trend, experts predicted a 25% increase in downloaded apps by 2022.
As of January 26, 2022, research showed that Google was processing over 3.5 billion searches daily, which equates to 1.2 trillion searches each year.
In other words, people are online seeking an easy, convenient, and fresh approach to nearly everything. The modern consumer has the world at their fingertips. Modern employees are looking for flexibility, growth, cutting-edge opportunities, and innovative methods to do their job well while serving the contemporary customer.
Are you accessible and engaging in that world? If not, you’re missing out.
What’s Trending in Insurance in 2023?
Presently, there are two primary trends in insurance that are sure to change the industry in 2023. Both involve modernizing your infrastructure to optimize your business objectives.
Automating the Process
Automating or simplifying the process is a must to create a flexible, scalable, resilient, and sustainable future. Adopting the newest technologies can help streamline your operations, enhance your capabilities, and optimize productivity and outcomes.
Where possible, insurers should take advantage of automation to help alleviate or reduce costs, meet deadlines, speed up the claims process, and increase opportunities to reach the consumer directly.
Straight-through processing (STP) is the name of the game in insurance, and it’s a concept worth embracing in 2023. Predictive analytics make the idea possible, and trusting the data is imperative to turning over a new leaf in the industry. This highly sophisticated tool is a subset of artificial intelligence (AI), providing insurers with a likely glimpse into the future using statistics-based schemes. It’s already used in the industry to determine risks, modify coverage, and ensure custom benefits to consumers.
Data compiled by B2B research firm MarketsandMarkets predicted the imminent growth of the global insurance analytics market for 2023. The market is expected to reach $11.96 billion, up from $6.63 billion in 2018. The compound annual growth rate (CAGR) was forecasted to be 12.5% during the five-year period.
The added benefit beyond more data-driven—and therefore precise and accurate—decision-making processes is that insurers’ efforts can now be more automated than ever, leading to fast and efficient results.
According to a 2022 article published by Insurance Business America, economic pressures, natural disasters, and changing demographics are the main driving forces behind the push for automation adoption. With inflation, increasing economic uncertainty, and heightened catastrophes wreaking havoc on insurers’ bottom lines, the pressure to adjust processes is quickly becoming more of an undeniable need rather than a haphazard desire.
Additionally, the appeal of technology cannot be taken for granted. People want to see what you can do and how you can do it bigger and better. Chief Analytics Officer at Insurity Kristin Marr explains that it's time to deliver in 2023 due to the ever-evolving technological landscape that’s driving stakeholder expectations for greater digital competencies.
Marr also explained how important it is for the workplace to technologically advance to stay relevant. According to Marr, “Your policyholders expect it, your agents expect it, but your employees also expect it. Especially when you’re bringing in [a] younger workforce, there are both external and internal expectations [to implement STP].”
Remembering the Individual
As overwhelming as the digital space is, people still desire a personal experience. Balancing the two—being wholly available while also invested in the individual—can be tricky. However, being more omnipresent to your customers will be huge for retaining loyalty in 2023.
Moving away from a policy-centric business model and instead hailing the customer first can help you provide more positive and personal experiences that establish consumer allegiance. This largely means meeting your customers where they are. Don’t expect your client base to bend to you. Instead, evolve to reach them.
One study determined that a third of consumers will turn their backs on a tried-and-true brand after just one bad experience, meaning you need to get it right every single time, and that starts with being accessible. Customers don’t want to be locked into one form of communication. Single platform applications are not realistic to our multi-channel environment, meaning your customers need variety so they can choose how you can best meet their needs.
Getting Started: Modernize Your Infrastructure With Oxford
There’s no question that moving away from legacy systems can be a complicated and crushing process. At Oxford Global Resources, we understand the hesitancy to commit to such an overwhelming task. That’s why we have fine-tuned our methods over the years to provide you with The Right Talent. Right Now.® to accommodate the insurance industry’s progressing needs.
You’ll need the right framework, software, cybersecurity, and data analytics platforms to perform at your best. Those who have already begun the ascent into the cloud can reap the benefits of the up-to-date digital proficiencies and leverage more advanced technologies to inform their daily business practices, optimize their execution, improve their customer service, and amplify their profitability.
But it’s not too late! We will be with you every step of the way. Partnering with Oxford can afford you the knowledge, resources, expertise, expediency, and minimal disruption needed to pull off a project of this magnitude without impeding your continued operations. We want to minimize your inconvenience while helping you provide heightened convenience to your staff and insureds.
At Oxford, your success is our success. In other words, we will do what we do best so that you can perform at your best—using your revolutionary outlook to proactively take on the advancing insurance industry while not missing a beat in business!