One of the most important qualities that any business can have in the 21st century is agility. The ability to swiftly respond to changing customer attitudes, market demands, and regulations is key to not just surviving but excelling in the fast-paced, dynamic, and competitive landscape that is the digital age.
Few industries need agility more than the notoriously conservative insurance industry, though. Life insurance and annuity carriers are now faced with an inescapable dilemma: they must adapt to the present circumstances, or risk losing their relevance. They can no longer rely on the belief that most people still think that insurance is a necessary investment: even now, insurance companies are struggling to capture and hold the attention of the generation that currently has the most spending power. Millennials are approaching their peak earning years, and they are earning more money than those who came before them. However, they continue to be an elusive market for insurers.
This issue can be attributed to an inability to deliver products and services in the timely manner expected by modern customers today. Many insurers have failed to realize that legacy policy administration systems are only crippling their insurance company; modernization of the core systems and processes that their organization uses is necessary in a world where everything can be accessed and obtained at the speed of light.
If this sounds uncomfortably familiar, this article is for you. Here are the advantages of using a modern rules-based life insurance system:
Fulfills the Needs of the Modern Customer
The modern customer has a specific set of expectations from the businesses they patronize that largely has to do with speed and personalization.
They want products and services to be delivered promptly, and they want the flexibility to tailor them to fit their specific needs. As the generation that grew up on the internet with smart devices in hand, they are experts at finding information, but tend to be repelled by overcomplication. Finally, they expect businesses to offer them an omnichannel experience that allows them to view and select products at their leisure, from any device that they own. When the modern customer asks questions, he or she expects an immediate answer.
The issue is that many of these expectations are incongruent with how insurers traditionally operate. Insurance has always been transaction-based, with products that are personally sold by agents who must communicate their necessity.
Most importantly, these products are heavily templated and designed for the greater majority, based on studies conducted by the insurer. The millennial market, on the other hand, accustomed as they are to being able to personalize and customize almost anything they purchase, would not find these kinds of rigid products very appealing. Indeed, their buying habits with regard to insurance bear this out.
Such a business model simply cannot be sustained today. Fortunately, automation of core processes can help solve some of these problems and deliver a better customer experience. Underwriting rules can be automated to make the workflow for onboarding new customers faster and more efficient. Pre-defined rules can be used to automate opening claims coverage and setting reserves. Even the process of finding answers to questions can be automated using live chatbots that can attend to customers in real time. Finally, automating billing and essential customer communications eliminates the need for people to do it.
Enables Insurers to Leverage Data
Information is king in the digital age, and businesses that are able to leverage what they have most effectively will win at the end of the day. That being said, most insurers possess truly breathtaking amounts of data that dates back decades, in addition to the data that they collect every single day. The problem is that they don’t know how to use it to their advantage.
Modernization at the requirements gathering stage of the customer onboarding process can help insurance companies obtain information more quickly. Digital capture solutions can scan any relevant documents and ingest the data they contain, before classifying, sorting, and indexing them for the insurer’s convenience. With rules-based systems like these made part of the business workflow, insurance agents can spend more time doing their jobs instead of manually entering customer information into the company’s database.
Meanwhile, data analytics can help insurers make sense of the information they have on their customers, which they can then use to analyze the way they do business now as well as guide them towards better decisions in the future. Specifically, it can lead to the creation of new products to serve the needs of specific markets. Data analytics can also help deliver these new products to the market faster, enabling your insurance company to beat competitors to the punch. Predictive analytics is the key for gaining insight into customer behaviors and emerging trends, allowing insurance companies to get ahead of expectations and effectively meet them.
With customers becoming more digitally connected and increasingly spoiled for choice, it is on traditional insurers to make sure that they do not lag behind their faster, more tech-adept counterparts. Modernization is key to refining business processes that have long needed a refresh. It’s how your insurance company can meet customers where they want to be engaged. It also improves your organization’s overall effectiveness at delivering the products and services that your customers need.
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