As tech start-ups disrupt and automate various processes, many service providers in the insurance industry have had to adopt an ‘adapt or die’ approach to innovation. Here are some of the digital innovation challenges facing insurance companies now:
1. Automation is getting smarter
The old relationships between, for example, stockbrokers and consumers are changing. Now automated investment advice tools provide investors with more ways to decide how they will invest their money. As consumers seek out consumer-friendly insurance tools, agencies that have not caught up with evolving technology are being left behind.
2. Business challenges have become increasingly digital
Due to the ‘digital turn’, with increasing transactions and processes taking place online, businesses are finding that they need digital innovation to solve core business challenges. Insurers are finding that consumers are choosing providers who provide self-service and comparison tools that cut out the necessity of a human go-between.
3. Lack of digital innovation leads to market share loss
The problem of losing market share in a highly competitive space is one many insurers are facing in the wake of widespread digital technology adoption. Insurers are needing to keep abreast of the latest tools that enable them to meet and exceed consumers’ needs and expectations.
4. Innovators are collaborating with insurance tech companies
The more innovative insurance providers have been collaborating with insurtech firms that create software dedicated to providing automated monitoring and other reporting. Insurance tech companies can provide insurance agencies and brokers with technology at a much lower cost than if they were to develop their own in-house solutions. Insurers that leverage this technology can now partner with potential competitors, supplementing their existing services.
5. Digitisation has increased consumer expectation of efficiency
An increasingly digital or online insurance space has meant that consumers now expect more convenience and efficiency. Legacy insurers are finding that their position is no longer so secure. This has driven companies to invest increasingly in partnerships with insurance technology innovators.
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