Digital transformation is impacting all industries at a fast pace. The process of digitization involves the conversion of the analog or physical data into computer accessible format, a task that can be easily accomplished with the help of outsourced document scanning services. Digitalization is the integration of digital technologies into existing processes. In the insurance industry, providing the best consumer experience is everything and digitalization is the key to achieving this goal. With the widespread use of smartphones, consumers are using digital channels not only for basic transactional activities, but also for financial services. This highlights the role of digitalization in the insurance industry.
Digitalization Creates Value in the Insurance Industry
Gartner defines digitalization as “the use of digital technologies to change a business model and provide new revenue and value-producing opportunities”. The key factors driving insurance industry digitalization are:
- Increases in the volume of electronic data
- Rising use of mobile interfaces, and the growing power of artificial intelligence
- Rise of new digital technologies, like cloud computing, machine learning, artificial intelligence, business intelligence, and the Internet of Things (Iot)
These factors have made insurance activities more automatable. Global Management Consultant firm Kearney points out that, in addition to propelling the growth of the insurance industry, digitalization is transforming the entire value chain. Global players are integrating new-age technologies in marketing and distribution, product development and underwriting, and claims prevention and customer support.
- Automation of manual processes: Digitalization in the insurance industry automates time consuming and challenging manual processes in claims processing, fraud detection, underwriting, policy administration and customer service. An example of an area where digital is making a major difference is title insurance which is linked to the multifaceted home buying process, with various players like the buyer, seller, real estate agents, lawyers and lenders. Digital title insurance facilitates smooth communication between these players with digital document sharing, workflow software, calendars and more. Workload automation reduces downtime, ensures better reporting, reduces staffing and other expenses, minimizes human error, and supports disaster recovery.
- Marketing and distribution innovations: Traditionally, insurance was purchased from traditional sources like corporate agents, offline brokers or banks. Now, digitalization is enabling consumers to buy insurance through multiple online channels at the click of a button. This has revolutionized the insurance marketing and distribution process.
- Seamless customer experience: Customers expect a seamless experience from their insurers. On an integrated insurance platform, customers can utilize a single window to compare multiple products and get product recommendations. Chatbots, video interfaces and other virtual assistance modalities make the insurance digital marketing and distribution process easier and more convenient for customers. When it comes to claims, insurers can transform the customer experience by investing in emerging technologies to deliver, speed, accuracy and assurance to the claimant.
- Product development and underwriting: Digitalization of insurance drives modernization of products and services. Using cutting edge technologies, insurers can accelerate product development, change how products and services are delivered, and even change the nature of those products and services. Data analytics and machine learning allows companies to offer more tailored products in a timely manner. For instance, insurers can leverage data analytics to craft a custom auto insurance policy based on an individual’s driving record, annual mileage, expectations, car model, and age. Digitalization also transforms the underwriting/risk scoring process. Automating underwriting with AI and ML models can help insurers interpret historical data fast and more accurately, and improve profitability.
- Claims processing and fraud detection: Claims processing involves various phases such as review, investigation, adjustment, remittance or denial of the claim. Automation eases the processing of large volume of documents in each layer of claims management, from patient onboarding and identity checks to claims adjudication. With digitalization of documents, information can be extracted automatically. Insurers can get real-time insights and status updates, compare data from multiple sources, flag inconsistencies, and distinguish between fraudulent and valid claims.
- Reduce costs: Research from Mckinsey shows that automation can reduce the cost of a claims journey by as much as 30%. Advanced platforms allow insurance providers to bring new products to market quickly and easily test and implement them which significantly reduce costs of developing new products. Data analytics can provide insights to better assess risk and price products, which reduces risk of costly mistakes. Technology also allows insurers to combine product and pricing tactics to attract and retain price-sensitive consumers.
Today, global insurance companies are leveraging single integrated platforms to manage legacy systems to cloud, virtualization and IoT and improve operational efficiency.
Document Scanning Services to Digitize Insurance Records
Insurance companies that want to automate their operations need to start out by digitizing their insurance records. With the large volume of documents that insurers handle, the best option would be to work with a document scanning company. Document digitization paves the way for digitalization in the insurance industry.