Insurance will remain a staple for as long as people have assets to safeguard – but the same cannot be said of insurers. In today’s digitally driven world, insurers are adapting their operations to meet customer expectations for speedy online service. Those who succeed at implementing digital insurance can expect to expand their businesses and enhance customer experiences; those who take too long in adopting modern technologies may soon find themselves unable to compete with more advanced competitors.
Though digital insurance is essential, implementing it isn’t always straightforward. To be successful, insurers must complete a radical transformation of their company culture and technology – an impossible feat in an often traditional industry. As such, many have been slow to take the digital leap. If you’re thinking about embarking on this transformation journey for your insurance business, here are some potential challenges you may encounter along the way.
Conquering the top challenges to transform into a digital insurance company is essential in today’s market. Discover how Liferay DXP is revolutionizing the insurance industry through digital experiences. Enhance customer experiences, streamline operations, and stay competitive with Liferay DXP.
Challenges That May Prevent Successful Digitalization
For insurers, however, the path to becoming a digital business is fraught with obstacles. Here are a few that insurers may face:
Difficulty Implementing a Connected Ecosystem:
Insurers must prioritize creating an ecosystem that can keep up with the rapid changes brought on by digital transformation while still providing excellent experiences for customers, agents, employees, and other business partners. Insurance companies often receive a reputation as being traditional, possessing extensive heritage and expertise but slow to adopt digital transformation.
Therefore, it is essential to create digital solutions that link users together and can connect their multiple touchpoints – including emails, website content, mobile applications, IoT devices, and physical locations – seamlessly. Insurance companies can stay competitive by providing their users with seamless experiences that exceed expectations. Adopting a new ecosystem that integrates digital and physical elements may seem like an expensive endeavor, but when done correctly it offers immense rewards.
Lack of Digital Agility:
As the insurance market evolves and digitalization increases, insurers must become more agile and efficient to keep up with the rapid rate at which the industry is growing. Your company’s success is not simply dependent on one area of operations or the products and services you offer; rather, it impacts every part of everything you do. You cannot truly offer an agile experience when it comes to product purchasing by introducing flexible pricing programs like pay-per-use without also incorporating digital agility into claim processes or your overall customer journey.
In reality, the most successful digital transformations are those where technology enhances efficiency and is integrated throughout a company’s operations and organization – both internal back-end processes and customer-facing portals. Unfortunately, according to Novaria’s report, 93 percent of carriers still struggle to support these agile initiatives.
Disruption from InsurTech:
Insurtechs are becoming a growing threat to the insurance industry. Not only are they multiplying, but they’re disrupting it through product development and delivery – adding to consumers’ ever-evolving expectations for digital integration and experiences. Research reveals that as digital continues to develop, consumer expectations of digital experiences also continue to rise; poor CX can be a deal breaker for new businesses.
In 2018, global InsurTech investment surpassed $2 billion. The market is projected to grow at an annualized growth rate of 41 percent between 2019 and 2023, disrupting product development and delivery while raising consumers’ expectations of digital integration and experiences.
As insurtechs continue their rise, many could potentially launch their own insurance companies in the future, creating new competition in the marketplace. This pushes traditional insurers to become “future-proof” in an effort to stay ahead of rivals.
Inoperable Systems:
One of the biggest obstacles insurers face is their incapacity to adapt to future operating models. When new technologies and tools come out on the market, insurers often struggle with including or implementing them into their technology stack due to incompatible legacy systems. 68 percent of insurance companies consider legacy systems the biggest impediment to digital transformation. This lack of integration prevents future integration between tools and systems, ultimately hindering progress.
Although acknowledged as a barrier to digitalization, it can also prove challenging to transition away from legacy systems. Not only is doing so costly but there are also risks involved. Enterprises could potentially lose valuable information and disrupt crucial business operations if they switch away from their legacy systems, which is why most insurers are hesitant to do so. But failing to act will thwart an organization’s capacity for competition, create security risks and drive up long-term costs of maintenance. Insurers must devise a strategy for replacing antiquated legacy systems if they want to become successful digital businesses.
Top 8 Digital Transformation Challenges Affecting Insurance Sector
Here are the top eight challenges facing the insurance sector as it embarks on its digital transformation journey:
1. Generate Value Through Data
It is essential to comprehend how you plan to utilize that data in a manner that adds value. Only then can you determine various uses of that information: personalizing offers, improving experiences for customers, and retaining clients. A Data-Driven approach plays an integral role in decision-making at insurance companies.
2. Customer Experience
Get to know your customers better and determine what it is that they truly desire and if it aligns with your proposal. This step should occur throughout every stage of the customer lifecycle, from prospecting until withdrawal.
3. Ecosystem Development
You must be able to adapt and evolve with new consumer demands, by branching out into uncharted territories and new scenarios that you are not typically exposed to. Policyholders increasingly demand comprehensive solutions that span across ecosystems and partnerships with other businesses. 3. Understanding Ecosystem Development
When responding to new consumer demands, you need the capacity to explore alternative avenues and scenarios you are unfamiliar with.
4. Collaborating with Insurtech
Some Insurtechs specialize in a specific area or problem and apply technological solutions. Traditional companies face a dilemma between competing with them or collaborating by contributing their knowledge.
5. Omnichannel
Omnichannel provides customers with an enhanced experience. Additionally, it generates new, rich data which allows for analysis and personalization of the business relationship.
6. Margin management
Insurance companies strive for a positive Return On Investment (ROI). But the digital transformation of the insurance business can only reduce costs or boost revenues if the right decisions are made and technology is used to create new business models based on it as an objective.
7. Cybersecurity
Companies must remain highly alert against threats in order to properly and responsibly safeguard customer data and online platforms.
8. Accelerating Digital and Cultural Transformation
Insurance companies face an immense challenge in adapting and reinventing themselves in the modern digital environment, placing customers at the center and taking advantage of digital innovation. To do this effectively, it is essential that a global mindset be adopted throughout the organization with accountability for change at all levels.
How Liferay DXP Is Revolutionizing the Insurance Industry: Transforming Digital Experiences
The insurance industry is no stranger to digital transformation. With the rise of new technologies, changing customer expectations, and evolving regulatory frameworks, insurers are under immense pressure to stay ahead. Adopting modern technologies can be a daunting challenge for many insurers – that’s where Liferay DXP steps in. In this blog, we’ll look at how Liferay DXP is revolutionizing digital experiences within this sector.
Digital Transformation in the Insurance Industry
Digital transformation in the insurance industry is all about improving customer experiences and streamlining operations. Insurers must offer their customers a streamlined, personalized journey when engaging with their brand. Furthermore, insurers need to guarantee their employees have access to advanced technologies for optimal efficiency in daily tasks – which is where Liferay DXP comes into play.
Liferay DXP: Unlocking Digital Transformation in Insurance Industry
Liferay DXP is a digital experience platform that empowers insurers to create seamless, personalized experiences across all channels. Liferay DXP provides insurers with numerous advantages, such as:
Improved Customer Experience
Liferay DXP helps insurers enhance customer experiences by giving them a unified view of their customers across all channels. This enables them to offer personalized offers and services, anticipate customer needs, and deliver seamless experiences across all touchpoints.
Streamlined Operations
Liferay DXP helps insurers streamline their operations by offering a unified platform to manage customer data, workflows, and analytics. This enables them to optimize internal processes, reduce costs and boost operational efficiency.
Scalability and Flexibility
Liferay DXP is an incredibly scalable and adaptable platform, customizable to each insurer’s individual requirements. This enables insurers to swiftly adapt to changing market conditions, customer demands, and regulatory demands.
Robust Security and Compliance
Liferay DXP offers robust security features to guarantee customer data is safeguarded at all times. Furthermore, the platform helps insurers adhere to regulatory requirements such as GDPR and HIPAA.
Conclusion
Digital transformation is essential for insurers that want to remain competitive in today’s digitally driven world. Liferay DXP provides a powerful platform that allows insurers to create personalized experiences across all channels while streamlining operations, improving scalability and flexibility, as well as maintaining robust security and compliance requirements. By adopting Liferay DXP, insurers can modernize their operations and meet the evolving needs of their customers – positioning themselves for success in the digital age.