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Life Insurance: A digital takeover or a hybrid journey?

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COVID-19 has greatly increased the need for digital solutions across the insurance industry, but do life insurance providers actually find their digital customer journey effective, and will such digital channels replace traditional face-to-face sales? 

The COVID-19 pandemic has greatly changed the way the insurance companies operate worldwide. Traditionally, insurers have depended on face-to-face contact to interact with their clients and guide them through the many insurance and risk management policies out there. However, due to pandemic-related restrictions, many insurers have been stripped of their main sales channels, forcing them to turn online to digital solutions, especially at a time when the demand for insurance has never been higher. The pandemic has resulted in a surge in health, business and travel insurance claims, in addition to an increased demand for coverage as individuals prioritize their life insurance plans in the wake of financial turmoil and uncertainty.

The Race for Digital Solutions

During this time85% of insurance CEOs say COVID-19 has accelerated the digitization of their operations, with 78% also saying that it has dramatically increased progress on the creation of a smooth digital customer experience. A McKinsey survey of European consumers also found that half of customers now prefer direct or digital channels. Digital solutions need to be processed in two steps: laying the digital foundation through digital channels like a user-friendly website and mobile application to offer customers a new online experience.

Only once the digital foundation is laid can insurers move on to curating a holistic digital experience and refining the end-to-end process, integrating multiple tools like robo-advisors, AI-chatbots and predictive analytics to better target the customer. However, 68% of insurers consider their digital sales journeys not yet effective. In an age where customer patience and loyalty is at an all time low and dozens of insurance alternatives are available a quick search away, customers are increasingly willing and likely to switch policies and reconsider their options.

Outsourcing digital solutions – Utilizing 3rd party APIs

Of course, insurance companies need not create their own software and build their digital presence up from nothing. Statistics show that there are many obstacles in the way of going digital and which can make the process time-consuming, costly, and confusing.

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Chart sourced from: KPMG

Instead of rushing to develop digital solutions, software-as-a-service companies, such as Privé’s Technologies, can supplement insurance companies and quickly and efficiently elevate them to digital effectiveness.

Privé’s end-to-end platform with direct custodian connectivity and end-user account consolidation addresses many of the pain points companies have when servicing clients, including data-based analytics. Furthermore, as an integrated and modular solution, Privé is able to augment existing systems without having to undergo a wholesale replacement or exchange of a system for clients. A modular approach also allows companies to tailor our software and microservices to their unique needs and does not require them to purchase software they do not need or use, creating a seamless digital customer experience.

The demand for hybrid solutions

However, the preference for digital solutions is not universal. In other reports, respondents show that they prefer in-person meetings with advisors to gain more in-depth and personalized advice, and that such meetings made purchasing much easier. As such, digital solutions cannot hope to completely replace the value placed on advisor-to-client interactions, which is viewed as being more personal and human than interacting solely with robo-advisors and algorithms, no matter how streamlined or user-friendly they are.

AI is meant to enhance customer interactions and requires a human to interpret and present the information in a way that is approachable for even those with a limited understanding of insurance. Having a balanced selection of human and robot solutions is therefore the best way forward for insurance.

In summary, those who do not keep up with the sudden need for digital solutions will be left behind as more digitally savvy consumers navigate the web to find the best insurance offers for them. Insurance companies have to adapt and create seamless digital journeys for consumers, which can be done through strategic partnerships with Software-as-a-Service companies. However, the human aspect can never be fully replaced, and an equilibrium must be reached between digital innovations and the traditional aspects of insurance.

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