Technology changes all aspects of the business world, from both the provider and client side. How are companies to deal with both the ever-changing methods they use and the ever-evolving demands customers put on them?
Mark Palmer, who has more than 20 years of experience in the financial technology industry, offers these thoughts on the trends that could transform the insurance industry in the near future:
- Digital channels replacing physical channels: A recent survey of insurance companies predicted that digital channels will continue to replace (and augment) physical channels in the next 3 to 5 years. From 20 to 40 percent of activities that are currently physical could become wholly digital, including pre-purchase, purchase, servicing, renewals, claims handling and adjudication, payments, customer feedback and resolution. This change will require IT and integration transformation at many (if not all) levels of the industry.
- The impact of millennials: In the coming years, the insurance agency is going to be relying increasing on the millennial generation, and as the first generation to grow up surrounded by smart phones and other online technology, that’s what they’re going to be looking for when it comes to insurance options. This means insurance providers and related companies will be forced to rethink their entire IT structure and replace systems designed for postal mail and phone service. New systems that tailor to the millennial generation will have to rely on cell phones and web-based interaction, which rely on different design philosophies and offer a different user experience.
- Embracing and extending IT infrastructure: Just because an insurance company’s IT structure needs to be reconsidered to appeal to new generations doesn’t mean it all must be replaced. Technologies exist to extend the life of a firm’s IT assets and increase return on investments. For example, the use of in-memory data grids to move and cache office data reduce the load on a company’s existing systems and can save millions of dollars that would otherwise be spent replacing still-useful components. This can make the areas of claims payment and claims adjudication more streamlined, without resorting to replacing an entire system.
With the constant stream of new and improving technological solutions, the insurance industry stands on the edge of a new era of both opportunity and risk. The risk, of course, comes when companies don’t adapt to the new reality. But companies who are willing to take a hard look at their current practices and technologies and either invest in updates or outsource those practices and technologies to a company equipped to deal with change, such as Data Dimensions, this could be a time of tremendous opportunity.