Ask most people which industries they think are the most innovative adopters of technology and it’ll be a long time before someone says insurance. It’s easy to understand why too. If the whole point of the industry is to reduce risk, why would it take a gamble on something unproven and potentially risky?

By Greg Gatherer, account manager at Liferay Africa

But over the past few years, insurance has actually embraced technology to an incredible degree. There’s a good chance that you use your car insurer’s driving app. In exchange for being able to track you and monitor your driving habits, you get lower premiums (provided you drive carefully).

You may also have switched to an insurer that lets you adjust your cover when you’re not driving, or to one that allows you to instantly cover household items by taking an in-app photo of them. And that’s just the customer-facing stuff. There are a whole plethora of back-end technologies that are designed to make insurers more efficient and to improve the overall customer experience too.

But even as technology plays an ever-more critical role in insurance, it’s critical that insurers do not become overly reliant on it. Instead, they should take an approach that combines technology with a human touch.

The tech imperative

There is, of course, a serious imperative for insurers to adopt digital technologies at operational and customer-facing levels. From a costs perspective, for instance, insurers are under more pressure than ever following the impact of Covid-19.

According to a 2021 report from Deloitte, the financial reports for South Africa’s biggest insurers were littered with references to muted new business volumes, increased claims, and short-term Covid-19 related provisions for poorer expected persistence and mortality. Given that insurers were already facing high overhead costs such as offices and staff, it’s never been more important for them to reduce costs and increase growth.

As such, automation and digitisation will be increasingly important to achieve improved sales efficiency ratings. Technologies related to data analysis, as well as the influence of social networks and mobile technologies, will drive the future of transactions.

From a customer-facing perspective, meanwhile, it’s worth remembering that customers have grown accustomed to accessing products and services through any channel or device. If they can interact with retailers or banks this way, why shouldn’t the same be true of insurers?

Here, technology has an important role to play too. By bringing together disparate data sets and breaking down silos within the organisations, tools such as digital experience platforms (DXPs) can help insurers improve the overall experience they provide their customers.

By bringing together customer data from across the organisation, DXPs can help insurers develop a single view of the customer and understand the factors that lead to customer loyalty, retention, and renewal.

That, in turn, allows them to develop a hyper-personalised approach to the interactions they have with individual customers. While this approach is data-led, it still makes the customer feel like their insurer views them as a human being, rather than just part of a dataset.

A DXP that includes self-service functionality can take this even further by allowing insurers to build a community around their brand. Such a community can boost loyalty and create meaningful conversations that can benefit your organisation. This curated community puts faces with names and asks customers to answer specific questions that help others understand the value of the insurer’s products.

It additionally helps customers feel like they belong to a larger group of people and reinforces that they made the right decision in signing up.

Human touch

It’s important for insurers to remember, however, that simply adopting these technologies won’t automatically result in a transformed company that creates amazing customer experiences. In order to truly reap those benefits, it’s vital for the technology to work hand-in-hand with a human touch.

Research shows that a collaborative approach between humans and robots provides better manufacturing outputs. The same is true for technology in the insurance space.

From an organisational perspective, therefore, it’s crucial that insurers get the whole organisation on board when it comes to adopting new technologies. If everyone understands and embraces how a particular piece of technology can enhance their ability to do their jobs, the organisation is much more likely to reap its full benefits.

From a customer-facing perspective, meanwhile, the sense of there being a human touch should extend to every interaction the customer has with the insurer. While things like messaging and billing can largely be automated, it shouldn’t feel like they have been.

Additionally, when a customer does need to speak to a human – whether that’s a broker or a contact centre representative – the experience should be as seamless as possible.

Here, the technology should ensure that the human representative has all the information they need to focus on what they do best: providing authentic, personalised interactions.

A flexible approach to the future

There is no doubt that technology is playing (and will continue to play) a massive role in transforming the insurance sector. But as insurers look to adapt to the future and head off the threat presented by upstart insurtechs, they need to ensure they don’t just rush headlong into adopting new technologies.

Instead, they should take a flexible approach that allows technology to work hand-in-hand with a human touch. In doing so, they put themselves in the best possible position to not only optimise internal operations but also create the kind of positive customer experiences that foster long-term loyalty and trust.