Finance
New demands, new approaches: how can fintech help in the insurance industry?
Global Banking & Finance Review®
Company
By James Turnbull, Chief Digital Officer, Reassured
Consumer expectation has been raised over the last few years due to the acceleration in digital services. Many industries across all sectors have adopted this digital transformation, and as a result, the ways that customers want to access all services has changed for good – insurance is no different.
Due to the rise of technology, consumers were already getting used to a smarter and more bespoke service. The pandemic also increased the need for remote or digital services, and the insurance industry can only guarantee a successful shift into the modern world by providing services that reflect these changes. It’s only through the development of fintech that the industry can ensure that the customer is always front and centre.
Sector comparison
With a reputation for relying on more traditional methods of communication, namely working with customers over the phone or via physical paper documents, it’s fair to say that insurance lags behind its counterparts when it comes to customer service. Consumers can now buy most products and interact with almost all service providers so quickly and effortlessly online or with a few taps on their smartphone – they don’t see why insurance should be any different.
And they are right. The industry can be transformed with the use of fintech and those that work in the sector agree – almost half of the industry globally know that fintech needs to play an important role in future corporate strategy according to figures from PWC. Despite that, less than a third of industry players look at partnering with fintech organisations.
With the appearance of online insurance platforms becoming more frequent, specifically offering a “buy now” option for their products, there is proof that a technological shift is taking place. To maintain a competitive edge, insurance brokers need to stay up to date with the latest technology, or risk losing their customers to those that do.
Customer centricity
All insurers want to broaden the number of people that have quick and easy access to insurance. Doing so means ensuring that all channels and routes to purchase are championed – the industry should be selling products in a way the customer wants to access them. For some, that means continued access to expert advice whether that’s over the phone or in person, but for others it means being able to access a simple, out of the box policy that they can access quickly and seamlessly online.
Technology can give these customers bespoke quotes based on a set of underwriting questions and give them an option to ‘buy now’ through the click of a button. It’s possible to buy a policy much more quickly when this tech allows provision of a quote within just 23 clicks on a website.
Not all customers will prefer to access services online. They will all have their own preferences, but implementing such technology does not mean the removal of traditional sales. Customers that prefer telephone contact, for example, will still be able to access it, but the point is that the industry needs to offer a method that suits all consumers if it’s going to push towards true customer centricity. Expectations have risen, and access to live help online, mobile apps and accessible policies is just the start. Adopting fintech at policy level can enable insurers to use app technology to collect data, for example on vehicle or health insurance.
The future
In the near future, the most successful insurers will offer the fastest and most efficient customer operations. This can be achieved through fintech by ensuring that the customers’ needs are being met in a timely and easy manner. If customers can have an easier journey from initial quote to full cover, insurers and brokers will have more success when it comes to increasing the number of people with protection in place.
As customer demands shifts to wanting a full omnichannel approach, insurers will need to change their processes to adopt this. Consumers are provided with more choice as to their preferred methods and levels of interaction with retailers and service providers, but they are also given the freedom to be able to switch channels and continue conversations without having to start the process from the beginning.
The journey to completely integrating fintech within the insurance sector is only just beginning, but there is no doubt that it will modernise the industry and drive it forward in a way that truly allows it to put the customer first.
Brought to you by Reassured
Fintech, or financial technology, refers to the integration of technology into offerings by financial services companies to improve their use of financial services.
Customer centricity is a business strategy that focuses on creating a positive experience for customers by placing their needs and preferences at the forefront of business decisions.
Digital transformation is the process of using digital technologies to create new or modify existing business processes, culture, and customer experiences to meet changing business and market requirements.
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