For many insurers, thriving in today's digital world depends not only on digitalising the user interface but the whole insurance process. Fear of missing out on the digitalisation hype has left many insurers stranded at the first quarter of the journey - with a polished front and an ageing back-end hardly suitable to keep pace with what digitalisation demands. Those who continue to push forward towards the finish line, will be rewarded by the improvements in the overall performance and - even more importantly - innovation-ready ecosystems.
Changing customer behaviour forces organisations across different industries to rethink and evolve their business models and put the customer at the centre of their strategy. Emerging in industries inclined to innovation, the customer-centric approach has become a must rather than just a competitive advantage in most of these industries, including insurance. Today's customer expectations are not set by other insurance companies, but rather by tech giants providing wonderful customer experiences.
Insurers have realised this and have invested heavily in portals and applications to improve their user experience and meet customer expectations of 24/7 availability and self-service. Improved customer experience comes with many benefits: more trust, greater credibility and a better reputation. Increased word of mouth, retention, and customer loyalty, together with improved employee efficiency result in savings, increased profits and leads to sustainable growth. In our conversations, however, insurers have acknowledged the need for a true digitalisation. To reap all the benefits of this customer-centric approach, insurers must take the strategy beyond the digital front.
Investments in so-called front-end digitalisation often leave insurers with a bittersweet realisation: a better-looking user interface does not necessarily result in improved customer experience. With no automated integration with the backend, the new user interface might even have a negative effect by setting expectations too high for the users who think the new front-end comes with streamlined 24/7 services.
Digital customers, used to instant response, are the most likely to end up disappointed when they realise they complete their user journey online but have to wait for an insurance quote to be processed manually by someone in the backend. Requesting a quote is not the only process users can start but cannot complete using digital channels. Something similar happens when users use a portal or an app to notify the insurer about a loss event or an accident. From a user’s perspective, their journeys and processes should be integrated and happen in real time right before the customer's eyes.
And while a better user interface doesn't come without benefits, much more could be done by digitalising processes at the back-end. Digitalising and automating a complete insurance process doesn't just mean a streamlined business to better serve customers. It can also result in huge operational savings, accelerated processes, even better customer experience and improved retention based on gained insights.
For insurers, process automation doesn't only mean operational savings but also improvements in overall accuracy, efficiency and maximisation of returns. And the potential is enormous. According to the McKinsey Global Institute report, there is 43% automation potential for the Insurance and Finance industries, allowing their employees to take on more meaningful work supported by smart solutions.
Automation of insurance processes is a complex, often lengthy project and requires a holistic view of the objectives, strategy and technology. To become truly digital, insurers should, along with modern portal and app solutions, invest in a modern insurance back-end. A platform that in addition to traditional core process support provides rule-based process automation capabilities, high levels of customisation without coding and an open interface to integrate with modern technologies and partners. The goal here is not only to automate processes and business decisions, but also cultivate an innovation-ready ecosystem of technologies and partners to better serve customers in the future.