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3 key technology trends for the insurance industry in 2016

While 63% of insurance businesses report that they are ready to move towards more digital practices, only 23% of these business are actually ready. (Photo: iStock 57046974)
While 63% of insurance businesses report that they are ready to move towards more digital practices, only 23% of these business are actually ready. (Photo: iStock 57046974)

Insurance agents and brokers are experiencing a major shift in what their customers and clients have come to expect.

By 2017, “digital natives” will dominate the workplace, which has huge implications for agents and brokers looking to engage with customers and grow their businesses. As the millennial generation matures and enters into its peak buying power, digital and more-automated ways of doing business will become a fundamental part of day-to-day workflows.

From the rise of mobile users and cloud-based technology to social media interaction, a Deloitte study on 2016 tech trends for insurance agents explains that insurance agents are finally realizing the need to be more nimble, efficient and accessible in order to serve today’s customer.

To add to this, there is a challenging regulatory environment that continues to grow among the insurance sector. A recent Deloitte report outlines that such regulations are no longer one between state and federal entities, but a hybrid of U.S. and state government regulation of insurance entities to ensure efficiency and adherence to state and federal standard procedures.

As a result, insurance agents not only feel pressured to digitize their workflow, but also must streamline business processes to make the cost of doing business more efficient and in-line with these regulations.

These complexities are challenging the fundamental ways agents and brokers have done business in the past. According to a Harvard Review report, insurance agents who embraced the digital practice reported a 65% cost reduction and a 90% reduction in turnaround time on key insurance processes.

Insurance organizations that are flexible, agile and can offer advanced technology to create the kind of business processes that today’s clients demand are the ones that pose a threat to the traditional, perhaps even larger insurance organizations.

The first step to staying ahead of these challenges in 2016 starts with deploying the right kind of technology among document management workflows and other daily business processes. In the end, the easier it is to onboard a customer and make agents more available to prospects and clients, the more insurance entities can grow their clientele, reduce operational inefficiencies and grow revenue.

While 63% of insurance businesses report that they are ready to move towards more digital practices, only 23% of these business are actually ready, reports a joint Forrester and Accenture study. To accelerate this process and ensure successful transition to digital workflows, there are three key areas we can expect insurers to embrace as they seek to create more automated, user-friendly processes.

1. Embracing a cloud-based and on-premise infrastructure

Just two years ago, 84% of companies were operating in the cloud and more than half of these companies reported that the cloud reduced the amount of work from IT teams, says PC World. Still, IT teams in the insurance sector struggled with what information is allowed by regulators to be stored via cloud vs. on-premise. To add to this, the proliferation of legacy technology is challenging the cloud-based-only approach. Many insurance entities are running off of 40-year old administration technology designed to manage the claims process, says a recent TrustMarque report. This kind of technology is hindering innovation, but insurance agents are far from instantaneously replacing such mainframe technology.

This year, as the insurance sector adopts a more streamlined workflow, we can expect a significant increase in the use of technology that can be operated via hybrid cloud and on-premise, ensuring ultimate flexibility for customers and clients and strong adherence to the ever-changing government regulations within the insurance environment.  

The time is now for insurance entities to adopt more digital practices in order to stay competitive against nimble, more innovative companies. (Photo: Shutterstock)

2. Automating business processes where necessary    

The key to moving toward a more digital environment and improving customer service is to automate workflows where necessary. With the excessive use of social media on the rise, and on multiple channels, customers expect ultimate interaction and personalization from their insurance agents and brokers. In fact, Forrester says online and cross-channel customer experiences will get the most attention in 2016.

While standard face-to-face interaction may be less common between insurance entities and their clients, relationships are still just as important, if not more important than in the past. As such, insurance agents need more time to interact with their customers and less time sorting papers, scrolling through documents and staying on top of processing claims. This is why automating workflows will be critical to moving the digital transformation forward in 2016.

3. Choosing programs and systems with customers in mind

Forrester-Accenture report recently dubbed this year the “age of the customer,” where the customer experience is at the heart of the digital movement. This means that technologies and new digital processes can’t be implemented with an administration-first mind set.

Take for example, something as simple as a digital application. While some technology may truly require three different phone numbers or two different emails from the client, how convenient is that for the customer filling out the application? Today’s customers expect a seamless, intelligent process from insurance businesses. While this may signal some disruption to internal processes for the agent, the end result must be to make programs easier to use for the customer, not merely just the IT team. Keeping customers top of mind in 2016 will be key to a successful digital transition. 

Without question, the dynamic technology landscape and the growing regulatory environment are changing the fundamental ways in which insurance companies of all sizes do business and engage with customers. The time is now for insurance entities to adopt more digital practices in order to stay competitive against nimble, more innovative companies. Yet, while many insurance businesses recognize the importance of digital transformation, very few companies are actually ready for the switch. Taking into account IT infrastructure that supports the digital needs of clients and customers, yet upholds government regulations, all while efficiently automating daily workflows will put insurance agents on the right path towards digital transformation.

David Brinkman is president and CEO of Atlanta-based electronic signature software company AssureSign. Follow him @DavidWBrinkman or @AssureSign.

Related: The insurance iceberg: Transformation going on under the surface

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