Digital transformation of insurance: between conservatism and modernism

Digital transformation of insurance: between conservatism and modernism

For many sectors, the health crisis has upset the order of things, and the world of insurance has not escaped it.

The need to accelerate digitalization has shown how much insurance is still dependent on an organization marked by a weak digital culture. This transition will only be successful if insurance companies stay true to part of their DNA while showing flexibility to stand up to other market players.

The historical culture of insurance: an obstacle to digitization?

During the critical period of the health crisis, the multiplication of digital communication channels with customers proved essential to maintain a good quality of service and listening. A desired and accelerated evolution but which raises the question of the place given to the unique link which binds the insurer to the insured. This claim relationship, which is at the center of insurance communication, is complex to change because to make it fluid, human contact is essential. It is this central aspect that insurance companies have had to take into account to digitize their methods of communication with policyholders. In a way, all customer requests do not necessarily require a strong relational intensity with insurance, but for other, more serious requests, a simple chatbot is not enough.

Should we say that the digitization of insurance is not enough to maintain a healthy and effective insurer-insured relationship? Difficult to agree with this when nearly 80% of consumers want to interact with their insurance via digital channels according to an EY study. For example, if the agency and its adviser occupied a central place a few years ago, their role has changed and now complements the services offered online. It is certain that the network of insurance agencies will not expand, but it is interesting to note that they still have an interest in establishing and consolidating a real relationship of trust with the insured.

Hyper-personalize the relationship with the insured

With the preponderance of digital in the years to come within insurance, the challenge of supporting the customer from one end of the chain to the other is essential so that a response is given to him quickly and adapted to his need. Indeed, to compensate for the lack of human contact, one of the solutions lies in the hyper-personalization of the relationship with the insured. An ambitious objective whose success is based on the collection of numerous data relating to its behavior as well as on the contribution of artificial intelligence to analyze them. So much data gleaned thanks to the multiplication of digital interactions on platforms or via other digital communication channels. A whole process to get to know the policyholder better, advise him better and thus offer a targeted response to his requests.

This trend is gradually taking hold in the internal organization of insurance companies, but it is not yet optimal because deploying such a strategy requires time and substantial financial resources. In fact, all insurance companies are not at the same stage of development and there are also some internal structural blockages. This is demonstrated by the case of Axa, whose CIO declared that it was necessary to build a bridge between IT and the business lines to move towards better mutual understanding and greater agility in the conduct of digital transformation.

A competitive sector that drives innovation

It goes without saying that there is no turning back for the insurance world. The highly competitive nature of this sector necessarily leads to a race for innovation, both to offer ever more targeted and attractive offers from a price point of view and to reduce costs and improve its competitiveness. Hence the need to reaffirm the growing importance of a strategy centered around the hyper-personalization of the insurance/insured relationship. While it is not the one and only response to changes in the sector, it still offers several guarantees to improve customer relations over time.

A posture that tends to automate a greater number of tasks, thereby involving more professions, sometimes new within insurance. Faced with this context of change, it is the duty of general management to involve the entire company in order to encourage strong support for these developments and thus gain in agility in the digitalization process. A process that is both demanding and permanent.

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