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5 ways Tech is building better customer experiences in Insurance and Banking
BFSI FinTech InsurTech Technology

5 ways Tech is building better customer experiences in Insurance and Banking

By Priyobroto September 28, 2023 - 105 views

Tech innovations have steadily reshaped the insurance industry and banking landscape in recent years. There are several ways in which this digital transformation is enabling superior customer experiences in the space. Multiple financial technology-driven innovations are steadily coming to the forefront and are completely reshaping the sector. For instance, reports state that several insurance players are looking at AI and only a few have upgraded their abilities throughout the spectrum. 

One of the biggest trends will be applying AI for disrupting claims, distribution, services, and underwriting, which will create models more familiar as humans in the loop. This enables better customer touch points along with scaling up productivity simultaneously. Distributed infrastructure and cloud will be crucial game-changers along with virtualization and automation in addition to trust architecture. Let us first look at how tech stacks up in the space before examining the ways in which it is creating improved customer experiences. 

Where does tech stand in the scheme of things? 

Tech innovations are already revamping the insurance industry and here is where they stand currently. 

  • The RPA (robotic process automation) market is already growing as per several reports, which also state how error rates can touch 20% and lead to costs of $17 billion per year. Hence, it is a tool that helps the sector combat manual procedures, avoid errors, and ensure compliance with regulations. 
  • These reports also indicate how AI can be used to combat fraudulent insurance claims. These are otherwise attributed to losses of $308 billion in just the U.S. 
  • McKinsey also feels that 50% of all claims processing will be replaced through automation by 2030. 
  • Predictive analytics with AI and ML are poised to enable several benefits. Several studies indicate how 67% of insurers can see expense reductions owing to taking more innovative approaches towards the predictive analytics space. These reports also show how sales may go up by 60% owing to the suitable adoption of predictive analytics. 
  • PWC reports how customer counts for those changing insurance companies due to the absence of suitable platforms have gone up by 80%. 

As can be seen, customer experiences can improve in the near future, with suitable financial technology implementation. Here is a closer look at the ways in which the insurance sector has steadily evolved over the last few years. 

Benefits that tech brings to customer experiences 

Some of these advantages include the following: 

  • Improved collection and analysis of data – Insurance has always been a data-dependent sector. Examining the risks of any specific event and then pricing products likewise is crucial for insurance companies. This is why actuaries are important. In recent times, analytics software and tools have helped companies assess risk profiles swiftly and more accurately while enabling personalized options for coverage. At the same time, policies will be tailored more to individual requirements, right from car and home insurance to travel insurance products. This customization will enable premium adjustments in real-time, including discounts for good behaviours, for instance. 
  • Better payments and billing procedures – The insurance segment plays a crucial role in the payments and billing space. Insurance companies can now tap payment gateways used by people while boosting overall experiences. Some features such as recurring billing and others have also benefited insurance companies greatly. Suitable payment technologies also come with several benefits like payment reminders, flexible methods of payments, automated recurring billing, and several others. 
  • Superior management of documents – Earlier, finding any insurance or policy document needed people to search through tons of paperwork. Owing to tech innovations, this procedure has become considerably simpler in recent years. Insurance applications usually enable access to vital documents and policies, lowering the risks of damages or losses in turn. 
  • Frequent and personalized communication – Proper communication is vital for enhancing customer experiences. This is the bedrock of the relationship of any customer with the insurance company. Communication is the key and insurers can now overcome these barriers by tapping in-app messaging, reminders, instant messaging, emails, and SMS-es. Chatbots can take care of ongoing communication and direct customers towards solutions at the same time. 
  • Swifter processing of claims – Many customers experience sizable stress while waiting between the filling of the claim and getting a response. Technological advancements have made this gap shorter for both parties. Automated claims processing and settlements are major advantages along with swifter reviews, lower documentation, and higher efficiency at the same time. Many insurance companies can settle claims in a few minutes with the help of cutting-edge technology. 

Many customers may testify to their insurance experiences improving over the years, particularly with technological advancements. Apps and online platforms have changed the game while multiple background or back-office procedures have also become more streamlined. Technology has also enabled higher cost and time savings for insurance companies while enhancing customer experiences considerably in turn. 

FAQs

1. What is customer experience in insurance?

Customer experience or CX is the entire process and stages of interaction between insurance companies and customers. This covers queries, inquiries, responses, feedback, guidance, paperwork, applications, claims filing, processing, and more. 


2. How can the insurance industry improve customer experience?

The insurance industry can considerably enhance customer experiences by lowering claims processing timelines with AI-driven automation. With accurate and swifter evaluation, companies can lower claim payment times considerably. At the same time, they can leverage modern technology to update and remind customers periodically, while using technological tools for responding to customers and providing them ample guidance whenever they need the same. 


3. Why customer experience is important in the insurance industry? 

Customer experience matters immensely in the insurance industry since it can make or break relationships. Customers may discontinue or not renew policies due to poor experiences in terms of solving their problems, getting information, or completing claims processing or paperwork. 

4. What is the best way to improve customer experience? 

The best way to boost customer experiences is to focus on resolving customer processes and formalities (including paperwork) in the quickest possible time. At the same time, there should be an emphasis on directing customers to the right resources whenever needed. 

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