What does digitization mean for Insurtech?
The term digitization isn’t just another synonym for digital transformation; it has a very specific meaning. Digitization describes any process or action that, having previously been undertaken without the help of computers, has now been taken over by technology. Essentially, any analog process that is now done by computers has been digitized.
Digitization can offer key direction for insurtech companies as they branch out to encompass more of the insurance industry. Innovators that keep abreast of new technologies will be able to stay a few steps ahead of their competitors.
How Is Digitization Transforming Insurtech?
There are three main areas where digitization is having the most impact.
1. Improved Customer Experience
Much of the digital revolution, both inside and outside of the insurance industry, has been driven by the quest to grow revenue by improving customer experience.
As with any other fintech service, insurtech is concerned with maintaining security and protecting personal data while still bringing all the advantages of industry 4.0 (the fourth industrial revolution, which “will take what was started in the third with the adoption of computers and automation and enhance it with smart and autonomous systems fueled by data and machine learning,” as it’s been described in Forbes).
Processes that are ripe for digitization have until recently been those that involve a lot of repetitive tasks and movement of forms and paperwork. Advances in technology now mean that more challenging tasks are now also open to digitization. Quicker and easier customer onboarding helps reduce abandonment, which unlocks value over the customer’s lifetime.
As well, on-demand customer service leads to better retention and satisfaction. For example, advanced chatbots are able to take on relatively complex aspects of customer service. Self-service portals have become more advanced and offer many more services and features compared with even a few years ago.
2. Increased Administrative Efficiency
The more basic end of digitization has been helping to automate everything from a customer’s initial purchase right through claims processing. A combination of automation and self-service features, added to the fact that information no longer has to physically move from one location to another, has helped speed things up in many industries, not just insurance.
These improvements free up staff time to focus on more complex, value-add activities, including any final decisions that can’t be made by machines alone. The metrics available from digitized services can also be used in conjunction with machine learning to optimize procedures and spot errors and potential fraud.
Regulatory compliance is a business-critical area that benefits from better administrative efficiency. Digitization reduces the need for manual in-person identity verification for online services provided by insurance and healthcare providers.
Digital identity verification can be performed by cross-referencing user-submitted data with trusted data sources or analyzing images of ID documents. These processes help insurance providers comply with data regulations such as HIPAA, protecting individuals’ medical records and other personal information. With identity verification and authentication, providers can prevent unauthorized access to insurance benefits, prescription drugs, government benefits or other financial gain acquired through identity theft.
3. Better Analytics and Improved Security
Machine learning can be used to analyze every aspect of claims and how they are handled. Optimization becomes easy, and the prediction of problems and opportunities well in advance can improve how companies function.
Close monitoring of real-time metrics can also improve security. Whether it’s an individual fraudulent claim or large-scale organized fraud, digitization makes problems simpler to spot.
What Makes Digitization Possible?
Concerns about data security and identity fraud are ever-present when an industry is digitizing. Dealing with financial products like insurance raises the stakes on those concerns even higher.
The data that insurers hold on their clients is highly detailed, making it extremely attractive to bad actors. However, advances in digital identity verification are making the digitization of all kinds of financial products a more practical proposition.
Trulioo GlobalGateway is a leading identity verification platform that helps insurtech providers reduce exposure to fraud, increase revenue growth, and meet compliance requirements. At the same time, automated workflows and end-to-end onboarding assist in welcoming real customers quickly and easily. GlobalGateway uses a layered approach to identity verification, giving access to multiple verification services and hundreds of data sources around the world through a single solution.
Insurtech is a fast-moving industry, and companies need to be able to bring products to market quickly if they’re going to stay ahead of the competition. By partnering with a reliable and innovative identity verification provider like Trulioo, insurtech organizations can offer innovative new products with confidence, knowing that their customers and themselves will be protected from risk.
This article originally appeared on The Insurtech Magazine.
Zac is a versatile leader experienced in managing and scaling high-growth companies. He is a veteran of all facets of startup and tech operations, including strategic planning and execution, corporate management, and building high performance teams. His expertise in risk and compliance software continues to drive innovative and effective solutions for businesses operating worldwide. Zac is passionate about fostering changemakers to make an impact and build groundbreaking solutions that are solving our world’s most pressing problems.