{"id":2363,"date":"2021-04-20T06:30:27","date_gmt":"2021-04-19T20:30:27","guid":{"rendered":"https:\/\/www.sage.com\/en-au\/blog\/?p=2363"},"modified":"2026-02-05T20:09:13","modified_gmt":"2026-02-05T09:09:13","slug":"digital-transformation-insurance-firms","status":"publish","type":"post","link":"https:\/\/www.sage.com\/en-au\/blog\/digital-transformation-insurance-firms\/","title":{"rendered":"How digital transformation can redefine insurance firms"},"content":{"rendered":"
\n\t
\n\t\t
\n\t\t\t
\n\t\t\t\t\t\t\t
\n\t\t\t\t\t\t\t\t\t\t
\n\t\t\t\t\t\t\tToday\u2019s tech<\/a>\t\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t
\n\t\t\t\t\t

\n\t\t\t\t\t\tHow digital transformation can redefine insurance firms\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t

\n\t\t\t\t\t\t\t\t\t\t\t<\/p>\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n\t\t

\n\t\t
\n\t\t\t
\n\t
\n\t\t
\n\t\t\t\t\t\t\t
\n\t\t\t\t\t\n\t\t
\n\t\t\t\n\t\t\t\t\"\"\t\t\t\tBruce Minty<\/span>\n\t\t\t<\/a>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n<\/div>\n\n\n\n

Insurance is an industry that has moved relatively slowly when it comes to embracing new technology.<\/p>\n\n\n\n

Legacy insurance players have been slow to modernise compared to other financial sectors that have invested in technologies such as automation and artificial intelligence (AI) \u2013 cornerstones of new technology.<\/p>\n\n\n\n

There are numerous big insurance companies that have focused on cutting costs to increase profits, rather than actively win new business and customers.<\/p>\n\n\n\n

And because they\u2019ve been successful for so many years, they may have stuck with traditional processes that have served them so well.<\/p>\n\n\n\n

But for those insurance companies that still have paper-based processes, they are likely to find themselves at a disadvantage.<\/p>\n\n\n\n

Coronavirus has hit businesses that haven\u2019t invested in digital transformation hard, as they strained to react to the changes in communications, services and processes that were needed.<\/p>\n\n\n\n

But even before the pandemic hit, customers didn\u2019t generally expect interactions with insurance companies to rival the customer service that many fintech businesses are now known to give.<\/p>\n\n\n\n

The insurance industry is ripe for disruption, and it may be your company that can take advantage of technology innovations to deliver more.<\/p>\n\n\n\n

Read on to discover how.<\/p>\n\n\n\n

Digital transformation in the insurance industry<\/strong><\/h2>\n\n\n\n

Big data provides opportunities that businesses neglecting digital transformation will miss out on. As insurance relies on data, you can make decisions quickly and earn a competitive advantage.<\/p>\n\n\n\n

Here are some of the areas you can explore when it comes to the benefits of data analytics in your insurance business:<\/p>\n\n\n\n

Underwriting<\/strong><\/h2>\n\n\n\n

One of the most critical tasks for an insurance company is to estimate the price of insurance policies based on risk assessment.<\/p>\n\n\n\n

In motor insurance for example, data analysis could allow you to accurately price policyholders by comparing driving behaviour and other types of relevant data.<\/p>\n\n\n\n

Data analytics also applies to other types of insurance. You could better drive value in health insurance, for example, if you can accurately measure behaviour with wearable devices and the Internet of Things (IoT).<\/p>\n\n\n\n

Insurers, for instance, could work with healthcare providers to provide real-time recommendations to customers at risk.<\/p>\n\n\n\n

The data needed for processing when it comes to big data analytics is vast, and it\u2019s only through advances such as automation, machine learning and AI that systems can process and analyse the data in real time.<\/p>\n\n\n\n

Claims<\/strong><\/h2>\n\n\n\n

Insurance customers are used to a long, drawn-out process when it comes to claims. This involves insurers, through the means of an insurance adjuster, assessing damage or loss and recommending whether the claim should be paid, flagging claims that have incomplete information or which they suspect are fraudulent.<\/p>\n\n\n\n

Today, online insurance companies may have to process many more claims than in the past, and the information needed regarding claims may also have increased.<\/p>\n\n\n\n

To manage this workload, it could be worth looking at robotic process automation (RPA) that can automatically flag issues and bring them to the attention of an insurance adjuster.<\/p>\n\n\n\n

You could even consider using RPA to submit claims in their entirety, which could leave staff free to manage other essential business needs.<\/p>\n\n\n\n

AI and machine learning hold rich possibilities, as they could revolutionise the claims process by adding risk monitoring, risk prevention, and risk mitigation.<\/p>\n\n\n\n

In the future, cars could send information about driving behaviour and the routes taken, updating insurance information in real time.<\/p>\n\n\n\n

In the event of an accident, these systems could send data to your insurance business, where you can automatically approve the claim.<\/p>\n\n\n\n

In home insurance, IoT technology could be transformative, with devices that monitor activities in the home. You could collect real-time data about household risk and intervene before incidents occur \u2013 such as prompting a customer to set up alarms or lock doors.<\/p>\n\n\n\n

\n\t
\n\t\t
\n\t\t\t
\n\t\t\t\t\t\t\t\t

Whitepaper: Is your accounting system a barrier to growth and efficiency?<\/h2>\n\n\t\t\t\t\t\t\t\t\t
\n\t\t\t\t\t\t

Find out if it\u2019s time to upgrade to a modern financial management and accounting system. Download our Whitepaper to learn the 5 signs your organisation has outgrown your current accounting system.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\tDownload Whitepaper<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\"\"\t\t\t<\/div>\n<\/div>\n\n\n\n

Customer service<\/strong><\/h2>\n\n\n\n

Today, customers have an abundance of choice thanks to digital, which means their demands have increased accordingly. Your insurance business needs to treat its customers well, or they will leave you for a competitor.<\/p>\n\n\n\n

Coronavirus has further increased the need for good customer service. It needs to be scalable and always available, through various digital channels.<\/p>\n\n\n\n

Through digital transformation, you can create a seamless and personalised customer service, allowing customers to use different devices to pay their bills, view policies, and even file claims, via one system.<\/p>\n\n\n\n

Rather than wait on the phone, customers want instant responses through their digital experiences.<\/p>\n\n\n\n

Like other customer-facing businesses, you can take advantage of AI via chatbots, which can respond to customers in an automated way. If advanced enough, they could help you manage customer claims quickly and efficiently.<\/p>\n\n\n\n

This could serve in winning new customers, as you\u2019ll have a personalised service for them.<\/p>\n\n\n\n

Steps in implementing digital transformation<\/strong><\/h2>\n\n\n\n

Digital transformation can empower your business by taking advantage of automation, machine learning, and AI. It allows you to be more agile, nimble, and scalable at both the back and front ends of your business operation.<\/p>\n\n\n\n

Here are six steps to implement digital transformation in your insurance business:<\/p>\n\n\n\n

    \n
  1. Assess your digital maturity and identify the gaps<\/strong><\/li>\n<\/ol>\n\n\n\n

    Plot your organisational maturity, which will be a guide to where you need to elevate your digital capabilities.<\/p>\n\n\n\n

    Analyse how you can drive a digital culture, how you can organise and resource this, as well as how you can invest in and take advantage of customer-driven insights.<\/p>\n\n\n\n

      \n
    1. Invest in core systems with a clear ROI<\/strong><\/li>\n<\/ol>\n\n\n\n

      Digital transformation will come with significant expenses.<\/p>\n\n\n\n

      So it\u2019s necessary to make sure that investments made in hardware and software show return on investment (ROI). This can include the cost savings that result from the productivity and efficiency benefits of new technology.<\/p>\n\n\n\n

        \n
      1. Take a steady approach in replacing your legacy IT systems<\/strong><\/li>\n<\/ol>\n\n\n\n

        To support digital transformation, you need the right digital architecture and cloud infrastructure.<\/p>\n\n\n\n

        You may have a mix of legacy IT systems to deal with, which means it\u2019s best to take a structured, step-by-step approach when analysing which systems you need to overhaul.<\/p>\n\n\n\n

          \n
        1. Go for quick wins<\/strong><\/li>\n<\/ol>\n\n\n\n

          You could have two roadmaps \u2013 one that follows a path of quick wins and another that focuses on the platform investments needed.<\/p>\n\n\n\n

          Quick wins show improvements that are visible to the business, show benefits and can be delivered quickly.<\/p>\n\n\n\n

            \n
          1. Become agile<\/strong><\/li>\n<\/ol>\n\n\n\n

            You need to use the technology you implement in the right way, which means implementing agile and adaptable support processes where departments other than IT are driven by technology.<\/p>\n\n\n\n

            It would be best if you have a culture where innovation can thrive, yet implemented in a way which is suited to the highly regulated nature of insurance.<\/p>\n\n\n\n

              \n
            1. Set up for the future<\/strong><\/li>\n<\/ol>\n\n\n\n

              Successful digital transformation requires businesses to achieve improvements in customer experience across all departments.<\/p>\n\n\n\n

              Technology isn\u2019t one size fits all \u2013 each company needs to find its way to make sure their transformation results in positive customer outcomes \u2013 the key metric that can help light the way.<\/p>\n\n\n\n

              Final thoughts<\/strong><\/h2>\n\n\n\n

              Rather than being left behind, taking a digital approach can propel your insurance business to the forefront.<\/p>\n\n\n\n

              And by using technology to make your company\u2019s processes more efficient, your people will have more time to offer the sort of customer service that results in you winning more customers and doing more business.<\/p>\n\n\n\n

              \n\t
              \n\t\t
              \n\t\t\t
              \n\t\t\t\t\t\t\t\t

              Whitepaper: Is your accounting system a barrier to growth and efficiency?<\/h2>\n\n\t\t\t\t\t\t\t\t\t
              \n\t\t\t\t\t\t

              Find out if it\u2019s time to upgrade to a modern financial management and accounting system. Download our Whitepaper to learn the 5 signs your organisation has outgrown your current accounting system.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\tDownload Whitepaper<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\"\"\t\t\t<\/div>\n<\/div>\n\n\n

              \n\t
              \n\t\t
              \n\t\t\t
              \n\t\t\t\t\t\t\t\t

              Subscribe to the Sage Advice Newsletter<\/h2>\n\n\t\t\t\t\t\t\t\t\t
              \n\t\t\t\t\t\t

              Get a roundup of our best business advice in your inbox every month<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\tSubscribe<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\"\"\t\t\t<\/div>\n<\/div>\n\n

              \n\t
              \n\t\t
              \n\t\t\t
              \n\t\t\t\t

              Browse more topics from this article<\/h3>\n\t\t\t<\/div>\n\t\t\t
              \n\t\t\t\t