Insurance

How has Technology Transformed the Insurance Industry?

insurance industry

Science and technology have spread their wings almost everywhere across the human race. From online payment of our various bills to purchasing groceries online, and seeing jam-packedroads through GPS before leaving office are some of the things that most of us do these days. With all these advancements in the various areas of our day-to-day chores, the fields of banking and insurance are also not untouched by the technology.

Gone are the days when people used insurance policy agents to understand insurance policies. With the availability of web aggregators in the insurance sector, people nowadays can easily compare different life insurance plans online. Additionally, they can purchase a suitable insurance policy from the insurance company’s website just like they purchase anything else from an e-commerce website. However, these are a few examples of the advancements that both science and technology have brought to the insurance sector. There are so many other changes as well that the technology has shown in this industry, let us discuss a few of them:

  • Producing new business: Unlike food items, the products of an insurance company are very few. So, to sell a few products and generate new customers, it needs to increase the in-house sales team. However, the advancements of technology and involvement of digital marketing in insurance sector have made this task much easier. It is simple and less expensive to reach out to a vast magnitude of insurance buyers through digital marketing than personally contacting the customers.

The number of insurance buyers attracted through holdings, TV advertisements, and banner promotions can easily be achieved by PPC campaigns of advertisements and at more affordable rates. In this way, technology has greatly reduced the customer acquisition cost.

  • Quick and easy policy underwriting: The two major factors that decide the growth of any insurance company are – policy underwriting and the efforts that their policy agents put in to evaluating and satisfying a customer. Traditionally, meeting customers, explaining the nitty-gritties of a policy, solving the queries of the customers, and convincing them require a lot of time and great efforts. It is because, in traditional method, agents have to meet their clients physically, and hence travel a lot to close even a single deal.

Nowadays, Life insurance plans are clearly explained online by the insurance companies. Customers can understand the various policy terms and compare multiple policies online without any interference. However, for any query, a customer can chat online with the agents. In this way, agents can quickly and easily decide the policy underwriting for a customer. Additionally, they can respond to many customers in a day and zero down on their prospect customers without much physical work.

  • Obtain increased ROI: ROI or return on investment is one of the major targets of most of the companies in order to gain profit. Generally, most companies take loans from one or more investors at high rate of interest. Technology is one thing that helps people largely to reduce the working capital and provides a great opportunity to insurance companies gain more profit online.

It is now possible for an insurance company to attain better profit margins through various online activities, robotic process automation, and electronic funds transfer. And, this all is possible because of the involvement of reliable technology in the insurance sector.

  • Engage and retain ideal customers, and improve brand value at a much lower rate: Companies spend a lot of money on building their brand value and on marketing & advertisement. Additionally, companiesspend huge capital on advertisements for retaining its brand value. However, with social media, it is now possible to do all with lesser money than what companies have been spending on traditional marketing methods. Companies can now use Facebook, Twitter, Printerest, Instagram, and other social media platforms to advertise and promote their brands.

Another biggest advantage of using these social media venues as marketing platform is that companies can target prime customers through analytics tools and other marketing insights provided on these portals.

  • Cut down the operation overheads: Every company thinks to save some money by reducing expenses wherever possible. Generally, operational overheads are one of the major concerns of organizations, in order to reduce additional expenses. And, in this process, more and more companies, such as fortune 500 organizations, have in-house resources to oversee their operational overheads. This department searches for new ways to reduce the operational overheads while helping the business processes.

Additionally, process automation is also being incorporated into the insurance industry by which employees and workforce cost can be reduced. The replacement of humans with technology will go a long way, as it is cheaper and more reliable to store, process, and retrieve documents electronically than employing a big team of clerks to perform all the paper work. Moreover, companies will not require more and more space to store all the papers, as everything will be on computers or stored on clouds. Resultantly, an insurance company does not have to have so many branch offices in various parts of the country just to maintain paper work and resolve customer queries physically. Today, it is because this all can be performed from a few offices only. In this way, technology in the insurance industry will greatly reduce the operational cost.

With the above mentioned changes, that insurance industry has seen or will see that due to the involvement of technology, there can be various other significant advantages as well. Advantages as in reduction of human resource intervention, availability of insurance policies online, and easy underwriting process, will be readily available. Most of the customer queries can easily be resolved online and that too in a much lesser time. Also, customers do not need to contact insurance agents for most of the insurance issues.

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About FinanceGAB

Ajeet Sharma is a financial blogger and I am blogging since 2017. Financegab is a personal blog dedicated to personal finance. The main aim of this blog to help people to make well-informed financial decisions.
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