5 Challenges Insurance Companies Must Overcome When Trying to Completely Digitize

5 Challenges Insurance Companies Must Overcome When Trying to Completely Digitize

Digitizing an insurance company is tedious for several reasons. Here are five of the toughest challenges your insurance company will face when trying to go fully digital:

1. Adapt to new trends and technologies

Currently, banks and insurance companies use procedures that date back to the mid-2000s. Their day-to-day operations often follow outdated practices and approaches, such as manual data entry, on-site claims preparation, etc. There is a lack of desire to switch to new trends and technologies, and they have good reason for that.

Insurance companies have employees who have worked there for decades. The adoption of new trends and technologies means that companies must train these employees to adapt to new systems.

Not only is this tedious, but these employees are also unlikely to want to learn anything new so late in their careers. Therefore, changing or moving to more contemporary ways of doing things will take time.

2. Improve digital user experience

The digital onboarding process for insurance customers must be sublime. This means that customers should not feel uncomfortable when trying to purchase insurance digitally. Carriers must offer user-centric web and app designs. The details of these systems should be modern, efficient and easy to navigate.

Web-based digital platforms should follow standard web design principles. The same goes for apps. Customers should not feel that operators are forcing them to join their digital platforms. Insurance companies need to make their customers feel welcome when they ask them to switch to digital insurance underwriting channels.

The customer support system should also be fast and efficient. Since the insurance takes care of the financial transactions, your customers may start to panic if they don’t know how to navigate the site.

That’s when they’ll call the customer support team and bombard them with questions. Your customer support staff should ensure that customers are not left in the dark about their queries and can register without encountering too many obstacles.

3. Digital verification of customer identity

The electronic identity verification process can be long and tedious if you do not deploy the appropriate measures. Identity management is a big problem in the digital world, especially when financial institutions have to deal with a case of identity theft every day.

The Federal Trade Commission – FTC – reported 1.4 million identity theft attempts in 2020 alone. This rate will only increase in the coming years.

Many digital insurance companies are moving to AI-powered verification systems like AU10TIX. Checking AU10TIX system uses image data along with other data points to verify customers. It can also report synthetic identifiers. AI-based verification systems like AU10TIX can also automate the digital onboarding process.

4. Process large volumes of customer data

One of the biggest challenges of using digital platforms is that you have to manage a large volume of customer data. Not only is this data large, but it is also very sensitive. Your customer data contains their names, ages, addresses, social security numbers and other sensitive details.

It is up to you, the insurance company, to protect this data and use it effectively.

First, you need to make sure that the data you get from your customers is complete and accurate. Incomplete data will lead to wrong types of insurance claims and even fraud attempts.

Then, to deal with this large volume of data, it will be necessary to turn to artificial intelligence solutions. AI makes working with Big Data much easier and more efficient. This is the hardest part, as you may need to overhaul your entire IT infrastructure to adapt to these modern practices.

As we discussed earlier, this is something you cannot implement in a day, a week, or even months. It’s a slow process and it will take years before the whole company agrees.

5. Provide security

When working in the financial sector, it is impossible to go fully digital without having a secure cyber environment. Cyberattacks against financial institutions have increased over the years.

These attacks are not only motivated by criminal intent, but often Politics. This means that attacks are becoming more and more threatening and can cripple your entire infrastructure.

Thus, taking adequate cybersecurity measures is not just a necessity. It is an integral part of the overall system. Failure to do so will jeopardize your business and your valuable customers.

Once you overcome these challenges, only then will you be satisfied with the progress you have made in digitizing your insurance company.

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