Industry Perspectives

Business Trends in the Insurance Industry

Posted by Ventana Research on Dec 15, 2022 5:00:00 AM

Determining what portfolio of investments best improves outcomes is a continuous challenge for the insurance industry. Utilizing digital technology to effectively engage customers and to provide differentiated services requires the modernization of applications to support policy processes. This modernization is critical to achieve optimal efficiency in digital customer experiences.

VR_Insurance_2022_Coverage_Logo (1)For insurance organizations, a steady focus on digital innovation that moves beyond transformation to digital modernization is necessary to meet industry requirements and enable a path towards excellence. Ventana Research has identified three key business trends every organization can address on the journey toward better outcomes.

Embracing policyholder experiences to prioritize retention and loyalty is a key trend. After decades of stalled attempts, digital transformation agendas now streamline processes to start with the policyholder and simplify interactions. This has become a key priority for insurers. But despite making internal processes more efficient and automated, these agendas may still fall short of aligning with the customer’s needs. For example, enabling customers to inquire and resolve issues digitally and avoid having to make voice calls.

Another focal point for insurers is the realization that technology is at the center of digitalization and efficiency and must be modernized, not held back by legacy systems. Insurance technology must anticipate the needs of newer and younger generations of customers, most of which have expectations born from daily digital interactions with other services from food and grocery delivery, to buying airline tickets and renting cars, to the online streaming services in media and entertainment. Younger policyholders want those same personalized, flexible purchasing and renewal capabilities from their insurance carriers and ability to engage digitally.

Our third business trend is the need to address the dynamics of the demographics being served. The confidence millennials and Gen Z have in the benefits of insurance is not as strong as older generations. Many do not have the lifetime loyalty that their parents may have had to the company providing their auto, home or life insurance policies, so establishing confidence and trust to grow and retain policyholders of any generation are critical. The current and old methods of insurance sales will not be the path forward and digital methods of engagement are essential for supporting any generation of potential customers.

The insurance industry is working through significant post-pandemic duress. Policyholder engagement is increasing but the digital transformation necessary to meet demand has not been sufficiently supported with modernized VR_2022_Industry_Assertion_Insurance_CX_2_Square (1)technology. The interconnected aspects of interaction efficiency, customer contact and policyholder expectations must be considered together for a more unified, yet flexible approach. To that end, by 2024, a large majority of customer interactions in the insurance industry will take place using digital channels instead of traditional voice calls.

Insurers should assess their current digital process efficiency and capabilities to ascertain whether they meet the needs of policyholders looking for a simplified digital experience. How insurers adapt to this new landscape will determine effectiveness as measured by policyholder confidence, product utilization and customer satisfaction. Ventana Research recommends that insurance organizations adopt operational processes that are digitally effective and best meet the industry needs. The risk in not being resilient and ready can have a direct impact on policyholder retention and profitability.

Topics: Insurance

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Written by Ventana Research

Ventana Research is the most authoritative and respected market research and advisory services firm focused on improving business outcomes through optimal use of people, processes, information and technology. Since our beginning, our goal has been to provide insight and expert guidance on mainstream and disruptive technologies. In short, we want to help you become smarter and find the most relevant technology to accelerate your organization's goals.