It’s no secret that every industry is affected by the onset of our digital revolution. Moreover, some industries, such as online streaming and catalogs, have come to fruition because of this technological shift. While little doubt surrounds Netflix and Amazon welcoming the influx of digital reliance, tenured industries are still analyzing how best to adapt.
It may surprise you that the concept of insurance began in 1752 when Benjamin Franklin founded the “Philadelphia Contributorship for the Insurance of Houses from Loss by Fire.” After that anecdote, it may NOT surprise you that the insurance industry is tasked with navigating our ever-evolving society. The 21st century has introduced an unprecedented hurdle to the insurance space—digitization. With its feet wet, the industry is attempting to forecast its inevitable nose-dive into the digital deep end. With its impressive performance record, the begging question is how, not if, the industry will adapt.
What a Digital Revolution Means for Insurance
Some insurance corporations are quicker to embrace the digital age, while others lag behind. In fact, according to Digitalist Magazine, 57% of all insurance companies do not include digital connectivity in their systemic business model, a disparaging statistic considering that over 50% of consumers utilize social media alone to compare carriers. Tech can easily become friend or foe to insurance depending on a carrier’s capacity and willingness to adapt. Carriers adopting elements of digitization see profound improvements to their business flow:
- Improved customer retention
- Increased employee satisfaction
- Enhanced underwriting risk evaluation, accuracy, and speed
- Streamlined processes of sending, receiving, and storing information
Take Your Agency Digital
Every facet of the insurance value chain is affected by digitization, from underwriting to claims and policy servicing to distribution. This affect leads to a fragmenting of the industry: in other words, firms emerge that cater services to one facet of the value chain. These firms promote competition among insurance agencies and dilute brand loyalty among policy holders. Quite a disturbing upset for carriers, right? Not necessarily.
Digitization can help carriers better understand their customers and provide mutually beneficial services. How? Take for example the popular behavior-pay model permeating the industry. This model considers a policy holder’s driving behavior, factoring speed, driving time, braking distance, and other behaviors when calculating his or her premium. This model is supported by a pluggable device synced with a policy holder’s vehicle. Through this, carriers can justify increased premiums to the Bo and Luke Dukes of the road, while lowering what responsible drivers pay out each month.
Carriers must also look for innovative ways to digitize formerly manual processes. Streamlining the process of sending, receiving, and storing documents is an excellent way to enhance workflows, save time, and increase efficiency.
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