How does an insurance company keep up with technology and changes in workforce, while continuing to serve its customers?
Customers dictate the future of the insurance industry.1 Changes and adaptations of three specific areas will help determine the success and future of insurance. These three components are:
- Integrating technology
- Serving customers according to their needs
- Adapting life insurance products for the changing workforce.
1. Integrate technology for customer ease
As technology develops and evolves, it will be critical for companies to continue to adopt and integrate innovative technology wisely while also weighing the risks associated with technology. Lately, discussions around technology seem to be focused on artificial intelligence (AI). Companies across industries are trying to determine the ways in which AI can be used to better serve its customers, while also reviewing and understanding the risks that AI presents.
According to Ernst & Young (EY), a global consulting firm, AI “has the potential to transform every aspect of the insurance value chain . . .” Specifically, EY believes the industry could potentially see AI’s impact in the following areas: underwriting, risk modeling, product innovation, loss prevention, claims and customer services. If AI is utilized in customer service, it would likely lead to faster customer feedback and streamlined responsiveness for agents.
If insurance companies decide to utilize AI, new governance models and risk management planning will need to be developed to ensure the risks are minimal and any threats to privacy and security are assessed. Protecting and using data will become more important as cyber threats increase and the need for cybersecurity increases. It will become increasingly important for insurance companies that utilize AI to continually monitor the regulatory environment and ensure that AI use cases are thoroughly reviewed before approving.
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"The customer journey is changing: a broader multi-generational market demands flexibility and versatility in insurance products."
2. Continue to serve customers in ways they need
The customer journey is changing: a broader multi-generational market demands flexibility and versatility in insurance products.
Customers’ decision making and choices may be affected by factors such as the resulting instability of the global pandemic, people living longer, rising costs of inflation, changes in the workplace, and the gap between saving for the future, owning a home, and maintaining living expenses.
Creating more agile and innovative products and services will be needed as people are looking for alternative ways to protect their future. The following are ways in which an insurance company may be able to better serve its customers:
- Clearly communicate offerings to make it easy for agents and brokers to consult with customers.
- Design products that grow with the distinct stages of a person’s lifetime, adjusting to meet the needs of a higher quality of self-care and life.
- Continually strive to optimize customer experience. Delivering personalized experiences supports every point of the customer’s journey.
- Create channels customers find easy to understand, easy to access, and are comfortable using to buy insurance products.
- The future of the smart phone or mobile device will likely be the dominant channel people use for customer engagement. Retooling technology where full digitization, automation, cloud service, and data integration are available is necessary.1
3. Address changes in the workforce
The workforce today has shifted and transformed from the 2010s.
Today, more people choose to be self-employed or a gig or contract worker. The gig workstyle is increasing. A person may look for work gigs (long or short contracts) or may work remotely. In 2021, gig work was only 15-25% of the global workforce. By 2025, it is predicted to be 34-40%.3
As a result of the global pandemic of COVID-19, remote work has grown significantly. By 2025, it is predicted 32.6 million Americans will work remotely.4
People are working longer and putting off retirement. Customers want insurance products with more flexibility matching their workstyle and situations, such as micro-policies or a lifestyle insurance which evolves over time.