opinion | Can the insurance sector still ignore trust?

Posted Jan 12, 2022, 9:08 AMUpdated on Jan 12, 2022 at 9:12 am

If there is still, without a doubt, a margin of progress on these subjects, the year 2022 could come to bring them a boost, in reaction to the crisis of confidence which is brewing and intensifying on the part of customers. .

The customer, in the crosshairs of developments for insurers in 2022

To meet demand from customers and bridge the gap that has grown in terms of engagement between them and insurance companies, the personalization of insurance products will become increasingly important in 2022. Indeed, traditionally product-centric, insurance does not drive significant customer engagement. However, the sector will have to show proactivity and creativity, to be part of the current trend of “customer centricity”, entirely centered on the customer. Among the good practices to follow, insurers will have to rely more on data and take on a more proactive role of risk advisors, instead of simply covering the risk after an incident or after a claim.

Consumers expect insurance to deliver the same seamless customer journey as the giants of e-commerce platforms. This desire for simplicity and convenience explains the trend towards “embedded insurance”, whereby an insurance policy is directly integrated into an existing product or offer. Built on the same principle as that of a product guarantee, it is increasingly practiced by companies.

In this type of insurance, insurers are no longer in control of their relationship with customers, to the benefit of intermediary companies that directly provide the insurance policy. A paradigm shift that can be scary, especially for large insurance companies who fear seeing an important part of their brand identity disappear. However, it is also a way to stimulate the insurance business in general and to increase the volume of premiums.

Faced with the crisis of confidence, which has intensified during the pandemic, insurers therefore have every interest in positioning themselves as partners of other players, and in extending the scope of their services to get closer to their customers and regain their trust. To integrate the ecosystem and collaborate with external partners, insurers need robust and modern API technology.

Refine and adapt technological choices to new challenges

In terms of digitalization, the different European markets are advancing at different paces, the United Kingdom in the lead, followed by France. While digital initiatives exist, they still have significant room for development. When it comes to cloud adoption, any insurer has necessarily looked at the cloud as a new direction to take in the future, but it’s more about how non-critical businesses operate. After two years of pandemic, the digitalization of the insurance sector is well and truly underway, but still concerns the surface rather than the core business.

In terms of choice of IT infrastructure, 2022 should see the SaaS (Software-as-a-Service) model become dominant in the choices of insurers, as opposed to that of internal IT infrastructure and resources. Indeed, relying on a solution provided by a specialized technology supplier brings real added value to insurers in terms of saving time, money and energy to keep their IT system operational and modernize it, benefiting from of innovation. Specialized technology providers can now deploy IT solutions for insurers in just minutes and allow them to test a solution before purchasing it. This promotes the business agility of insurers, but also their operational and IT efficiency.

The automation of tasks should also intensify in the coming months; nevertheless, a total automation of the activity still remains utopian and difficult to envisage, for the simple reason that human expertise will always remain necessary. In their drive to generalize automation, insurers will have to remain vigilant in maintaining good transparency with their customers, to keep them informed of the progress of their claims and operations. To move in this direction, the intelligent systems that support the automation will have to provide as much information as possible to maintain this transparency and this communication with the users.

The theme that appears to be dominant for 2022 is that of trust, both in the context of the centricity of practices on the customer and in the transparency of communication which must be maintained on the part of insurers to ensure that digitalization processes run as smoothly as possible. In general, customers will trust the insurer who will be best able to simplify things for them, to minimize the number of interlocutors necessary and the number of different procedures to operate, and to offer the product the most compelling and suitable one that meets their needs in a personalized way.

Emmanuel Naudin is Sales RVP, Southern Europe at Guidewire.

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