The world is transforming to adopt digitalization everywhere. And as the world is changing, the insurance industry is also not an exception. With the evolving era, the insurance sector is adopting advanced technologies like artificial intelligence, predictive analysis, and IoT, which are bringing about a massive revolution in the whole working process.
Moreover, due to the pandemic, the whole world is switching to virtual methods to avoid physical contact, thereby making the insurance business quite complex. According to surveys, health insurance has a growth of 17% in sales from the first quarter of 2019 to 2020. But in the cases of P&C, travel, and vehicle insurances, sales have fallen drastically.
Thus, the situation comes with plenty of digital transformation challenges for the insurance sectors' CIOs; a few of them are discussed below.
Insurtech has created a revolution in the insurance business. Taking advantage of all innovative technologies such as data analysis, GPS car tracking, chatbots, etc., Insurtech is going on with its impact. It plays a significant part in shaping the upcoming structure of the insurance industry.
Hence, the biggest challenge that will affect the CIOs is streamlining their years of experience with the new tech-savvy Insurtech solutions. However, Insurtech companies lack years of experience, as they are more inclined to focus on the latest ways of reaching out to customers, policyholders, and partners. Hence, it is vital to align more speed, agility, and skill to market at the right time to catch the flow.
When it comes to buying an insurance policy, consumers mainly look for the insurers' experience in the market. According to a survey, 40% of consumers trust to continue their relationship with an insurer, based on the quality of experience delivered for better insurance policy management solutions. Consumers expect the insurers to offer omnichannel solutions using modern and trendy mediums like web portals, mobiles, chatbots, and call centres so that they can enjoy a seamless experience from everywhere.
Though it sounds pretty easy, when it comes to practical application, it is undoubtedly complex. The agents and brokers are one of the vital components of insurance businesses. Also, many agents come with a poor experience, which makes it quite challenging for the CIOs of those insurance companies.
According to a current business study, the insurers' overall independent agent satisfaction is 735 on a point scale of 1000. Hence, it is an area of pain-point for the CIOs to organize and handle agents' performance, along with the growing digital scenario.
As the competition continues with its growth, many large insurers evolve through their service offerings into an integrated ecosystem. Insurance programs like pay-as-you-go are automatic programs that adjust rates based on the miles you drive. As a result of this, insurers can broaden their market to newer customers. This diversification of products and services is quite progressive in every aspect.
But it has certain complexities. Insurers need to connect with different components in their ecosystem in a quite seamless manner. This is important to ensure the best experience for the new-age customers who look for more fluidity in their expertise. It is a challenging scenario for the CIOs to include all the modern digitized infrastructures and make the entire system go along with it in a short period.
Managing the entire workforce through this digital era comes with multiple challenges. There can be unsecured home networks, which can pose a risk for the organizations. Also, handing over seamless access to all applications and resources to the employees is prone to enhancing the business's complexity.
So, in 2021, most of the CIOs are about to face these priorities.
Removing all the burden from IT teams is probably the most crucial challenge for the insurance industry's CIOs in 2021. As everything is falling upon technology, it is essential to ensure that the support staff is not much overwhelmed in using all constrained resources efficiently to achieve long-term success.
Though the insurance sector's digitalization comes with plenty of prospects and growth, it is imposing some more responsibilities and challenges on the CIOs. To adopt an entirely new workflow is very challenging for traditional insurers. Hence, long-drawn years of experience need to be aligned well with digital evolution to grow the industry better.