5 Challenges That Insurance Companies Have to Overcome While Trying to Digitize Themselves Fully
Digitizing an insurance company is tedious for several reasons. Here are five of the most difficult challenges that your insurance company will face when you try to go fully digital:
1. Adapting to Newer Trends and Technology
At present, banks and insurance companies use procedures that date back to the mid-2000s. Their daily operations often follow outdated practices and approaches, like manual data entry, preparing on-site claims, etc. There’s a lack of desire to switch to newer trends and technology, and they have good reasons for that.
Insurance companies have employees who have been working there for decades. Adopting newer trends and technology means the companies need to train those employees to adjust to the new systems.
Not only is it tedious, but also unlikely that these employees would want to learn something new so late in their careers. As a result, the change or shift to more contemporary means of doing things will take time.
2. Improving Digital User Experience
The digital onboarding process for insurance customers must be sublime. That means customers should not feel uneasy as they try to sign up for insurance digitally. Carriers need to come up with user-centric web and app designs. The details in these systems must be modern, efficient, and easy to navigate.
Web-based digital platforms should follow the standard web design principles. The same goes for apps. Customers should not feel like carriers are forcing them into joining their digital platforms. Insurance companies should make their customers feel welcome as they ask them to switch to digital channels of signing up for insurance.
The customer support system also needs to be fast and efficient. Since insurance deals with financial transactions, your customers are likely to start panicking if they don’t know how to navigate the site.
That’s when they’ll ring up the customer support team and bombard them with questions. Your customer support staff must ensure that clients are not left in the dark regarding their queries and that they can sign up without facing too many obstacles.
3. Verifying Customer Identity Digitally
The electronic identity verification process can be lengthy and time-consuming if you don’t deploy the proper measures. Identity management is a big issue in the digital world, especially when financial institutions have to deal with a case of identity fraud every single day.
The Federal Trade Commission – FTC – reported 1.4 million identity fraud attempts in 2020 alone. That rate will only increase in the coming years.
Many digital insurance companies are switching to AI-based verification systems like AU10TIX. AU10TIX’s verification system utilizes image data with other data points to verify customers. It can also flag synthetic IDs. AI-based verification systems like AU10TIX can also automate the digital onboarding process.
4. Dealing with Large Volumes of Customer Data
One of the biggest challenges of using digital platforms is that you have to deal with a large volume of customer data. Not only is this data large in size, but it’s highly sensitive too. Your customer data contains their names, ages, addresses, social security numbers, and other sensitive details.
It’s up to you, the insurance company, to keep this data safe and utilize it efficiently.
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 attempts at fraud.
Next, to deal with this high volume of data, you’ll have to turn to artificial intelligence solutions. AI makes working with big data much easier and more efficient. That is the toughest part because you might have to overhaul your entire IT infrastructure to accommodate such modern practices.
As we discussed earlier, that’s something you can’t implement in a day, week, or even months. It is a slow process and will take years before the entire company is on board with it.
5. Ensuring Security
When you’re working in the finance sector, it is impossible to go full digital without having a secure cyber environment. Cyber attacks on financial institutions have increased manifolds over the years.
These attacks are not just because of criminal intent but often political. That means attacks are becoming more threatening and can cripple your entire infrastructure.
So, taking adequate cyber security measures is not only a necessity. It’s an integral part of the overall system. Failing to do that will jeopardize your company and your valued clients.
Once you overcome these challenges, only then will you be satisfied with the progress you’ve made in digitizing your insurance company.