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3 ways insurers can compete against new market entrants

In a competitive environment, insurers should focus on using technology, streamlining processes, cutting costs and delivering exceptional service. (Photo: iStock)
In a competitive environment, insurers should focus on using technology, streamlining processes, cutting costs and delivering exceptional service. (Photo: iStock)

Every industry experiences the threat of competition.

The insurance industry certainly isn’t excluded from that threat, which brings trepidation to the established carriers who have experienced competitive pressures in this highly competitive and regulated industry.

The likelihood of new entrants urges established insurers to determine the best way to differentiate themselves and their services.

Evolution becomes imperative when competing with these new entrants in the market. When evaluating whether you’re organization needs to embrace change to compete with more nimble and modern competitors, ask the following questions:

  • Has your organization embraced digital transformation?
  • Is your organization able to evaluate risks, underwrite new business and deliver policies in an efficient way?
  • Is your organization able to deliver fast and accurate decisions on claims?
  • Is your organization meeting your customers’ needs in a timely and accurate manner?   

If the answer any of these questions was no, it is time to evaluate your current business tools and processes and strategize about how you can improve those processes to become more efficient, deliver higher quality interactions with customers and compete with new entrants. Often insurers find by implementing the right technology strategy, they can embrace the changes needed to thrive against new competition.

The tech evolution

It’s not that long ago that technologies such as image capture and document management were disrupting the way insurance organizations did business.

Today, those technologies are assumed for most organizations, and have continued to evolve as newer technologies such as cloud, mobile and even drones are becoming more appealing for insurers looking to attract a new generation of customers.

Related: Outside industries retreat from the business of insurance

Some of the most advanced and ambitious insurers have chosen to use a reliable, secure and flexible enterprise content management system because they see the agility it brings to their business strategy. What they may not have realized at the time was the on-going benefits they would achieve, even as the market changed, to help them prepare to compete against new entrants within the market.

There’s no need to panic if your organization wasn’t on the forefront of selecting these types of technology applications years ago. Now is the perfect time to focus on developing a strategy that will carry your organization into the next wave of technology innovations.

Here are three tips to help strategize and implement change to combat the threat that new entrants pose:

Calculator vs. smartphone

Is your technology up to date? (Photo: iStock)

1. Embrace a true digital environment

It seems rudimentary to state this, but paper is expensive.

Many organizations embraced technologies that eliminate paper long ago. However, those products may be antiquated and not provide the capabilities necessary to promote faster digital processes.

Increasing expectations from customers for instant access to information require insurers to evaluate their technology to ensure that they have the tools necessary to meet and exceed customers’ expectations.

This is the first step in the processes to give your customers what they want it, when they want it.

2. Look into processes that can be standardized through digital means

Embracing a digital environment is a critical first step, but only the beginning of the evolution needed to stay competitive.

Once an organization has achieved digitization, they should set the next goal to automate and standardize processes.

More insurers are doing this by integrating best-of-breed solutions, including enterprise content management with claims and policy administration applications, to add functionality such as workflow, business process management, case management and records management.

By connecting systems where documents and data live to transactional processes, insurers create a true end-to-end digital environment with unified processes.

This type of integration ensures faster processing, accurate information sharing between systems and comprehensive reporting capabilities to ensure you’re meeting your customers’ service standards and decreasing the chance of a competitor attracting your customers.

3. Improve margins

There are a lot of complexities and added overhead that arise within insurance operations.

By providing intuitive access to content and automating process steps that don’t add value, the time it takes to complete a process and come to a decision is greatly reduced. Thus, insurers are reducing the cost of performing those business functions while improving customer satisfaction. This gives their employees and agents the ability to focus on higher-value tasks.

The added value of an enterprise content management system is its flexibility to grow and expand to other departments to gain additional return on investment. After an insurance organization has achieved digitization within one department, it can evaluate how to leverage similar results with other processes or departments to stop software sprawl.

Beating the competition

New market entrants see the insurance market as an opportunity to bring innovation by building new product offerings.

This revelation is leading insurers to reevaluate their IT strategies because they see the direct correlation between strategic use of technology and better customer service. By using best-of-breed systems, insurers can complete work efficiently, using integrated software that digitize and streamline processes.

Related: Verisk CEO: Here's what it takes to encourage innovation

The ability to provide great customer service on a consistent basis appeals to every generation, in every market.

In such a competitive environment, insurers looking for an advantage need to focus on using technology to eliminate paper, streamline and standardize processes, drive down costs and deliver exceptional service.

True differentiation comes when the established players focus on what matters to their customers and couple their greater knowledge of the market with the right technology to outperform challengers, improve margins and create customer-centric offerings.  

Jennifer Mangino is the industry manager for insurance solutions group at Hyland Software Inc., a Westlake, Ohio-based enterprise content management systems developer.

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