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Founder and CEO, Zopper
It would be an exaggeration to say that the world we live in is near-completely digital. From booking a cab and buying groceries right up to visiting a doctor, a digital version of every service and product is available for use. And, the insurance industry is no exception. 85% of insurance CEOs are of the opinion that the pandemic has turbo-charged digital transformation within their organizations. Not just this. By the year 2025, 95% of customer conversations are predicted to be handled by chat bots. For an industry that has been highly dependent on its human agents, what will this mean and what must one do to remain relevant as an insurer in the digital world? Read on to know.
What will need to change?
Within traditional insurance models, the buying process has always been a highly assisted one, be it through agents or brokers. This made it easier for insurance providers to source and distribute large ticket size policies that often included everything from life and health to automobile insurance. However, the digital world demands an overhaul in the entire buying process.
Insurance providers will need to start offering sachet or bite-sized insurance policies wherein the customer can purchase life or non-life insurance with bite-sized or small premiums. Making these policies available for purchase via digital channels and in exchange for a minimal amount of documentation will be a necessary change for insurers who are looking to attract a younger customer base. While these sachet insurance offerings might not completely replace more holistic insurance policies, the fact that they often get affected by vector-borne diseases, buy expensive electronic appliances, and incur high travel expenditure, insurance providers need to offer bespoke products in accordance to their life-style to remain relevant to new-age customers.
 The digital buying process has also led to an increase in the demand for multiple access points where the insurer can interact with the customer. The tech-savvy customer also expects to be able to move between channels seamlessly during their buying journey, further complicating customer engagement. However, it is noteworthy that trusted advice from an agent or broker remains important to customers, with 55% customers being unsure about buying insurance online even when 85% of them use digital channels in their insurance buying journey.
It is not just the buying journey that demands transformation. With embedded and contextual insurance becoming the need of the hour, insurance providers will need to be ready with an entirely different set of offerings to cater to customers in the digital age. Insurers will need to bundle up and stitch their offerings into a product or service that the customer values, allowing one to buy insurance right when they need it. Asking a customer to invest in automobile insurance right after they’re done choosing their new car or bike makes a lot more sense and that’s exactly what embedded insurance is all about. What embedded insurance also does is provide a distribution advantage that comes with being associated with a brand the customer already trusts and is willing to invest in. 
To be relevant and resilient, what should insurers focus on?
While embedded insurance is a good starting point, that’s not enough to ensure insurance providers remain in the game. The transformation is digital. So, here’s what insurers will need to keep their eyes on.
Personalized and omnichannel customer experience: Customers remain at the core of this change, and that’s something insurance providers will need to remember. By virtue of being tech-savvy, the modern customer is a lot more informed and aware of what they want from their insurance policy. This customers have complex needs and only value policy literature only when it is tailored to their needs. Hence, to tap into this new customer base, insurance providers will have to optimize every customer interaction, create a sign-up process that is friction-free and quick, and allow customers to seamlessly move between channels during the buying process.
Cutting-edge technology to transform legacy systems: Artificial Intelligence, Analytics, Block Chain, And Big Data are some of the new-age technologies that insurance providers will need to invest in. With digital-first insurers and Fintechs entering the insurance space, it is only a matter of time before traditional insurance models become obsolete. The modern customer is short on time and deploying conversational AI and NLP-enabled chat bots might be the only way to ensure interaction with them. Further, an investment in analytics and Big Data can go a long way by providing the right kind of insights into customer needs, in turn enabling insurance providers to deliver highly personalized offerings that capture the minds of a highly demanding customer base. 
Building an innovation and digital-focused culture: The insurance industry has had a reputation for sticking to its traditional ways, and doing away with that culture is a much-needed change. No amount of investment in technology can replace the need for a digital-first mind set, especially in times when digital transformation is no more a choice but a necessity. Be it collaborating with Fintechs and Insurtechs, integrating with third-party technology providers, or going for completely internal digital transformation, insurance providers will need to remain open to all options and invest in the one that helps them achieve their goal quickly. 
The insurance industry is witnessing the rise of a new era; and the way in which insurance providers have risen up to the occasion and picked up pace when it comes to digital transformation, goes on to prove they are resilient and capable of doing what it takes to remain relevant.  
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Views expressed above are the author’s own.
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