Optimizing Innovation for Successful Digital Transformation in the Insurance Industry
Posted April 26, 2017
The established giants in the insurance industry, who have dominated the market for years, find themselves being challenged by upstarts employing innovative technology in an effort to appeal to digital consumers who are accustomed to the speed and convenience of shopping and conducting business online.
Insurance is a $1.5 trillion business ($4.6 trillion globally globally) that contributes about 2.6 percent of the U.S. gross domestic product. Insurance leaders who want to keep these insuretech startups from taking too big a piece of this pie must undergo a digital transformation.
However, successful digital transformation isn’t just about streamlining processes to protect margins or launching me-too services to counter your competitors. It’s also about creating the agility to jump ahead of the pack with truly differentiated offerings, as well as protecting your customers and business from cybercriminals.
With that in mind, a growing number of insurers are deploying advanced digital identity intelligence capabilities as part of their digital transformation in an effort to enhance the customer experience, reduce fraud and enable new business models.
While transformation isn’t easy, keeping a focus on five key areas can bolster success.
Understand the Person Behind the Policy
In a digital world, it is difficult to verify the identity of the person applying for one of your policies. Since 2013, fraudsters have compromised more than 5 billion personal identities, costing organizations an estimated $6 trillion in losses. Today, 1 in 10 account creations is fraudulent — up 35 percent in just the past year. Digital identity intelligence solutions leverage shared, anonymized global threat data and advanced analytics to establish the true identity of each applicant in real time so you can issue policies with confidence.
Prioritize a Single View of Identity
Success in a digital landscape means being able to establish a single view of the customer, regardless of the data sources used to validate them. End-to-end authentication must incorporate identity verification and fraud detection capabilities that easily integrate with third-party data sources to help you reduce fraud and friction — without increasing the burden on internal systems and resources.
Deliver the Services Millennials Demand
Product and service innovation relies on making nimble business decisions. The same dynamic data sources used by digital identity solutions can also be harnessed to deliver the frictionless, real-time services today’s consumers demand — unencumbered by legacy systems. The ability to develop, test and launch new offerings with trusted customers and prospects enhances organizational prowess while reducing exposure to business and financial risk.
Detect Threats and Drive Down Premiums
Understanding digital identities enables companies to accurately detect high-risk behavior in real-time, including crooks angling to sell or sign up for fraudulent policies or file fraudulent claims. With fraud more effectively thwarted, companies are able to offer lower premiums to legitimate customers, boosting competitive positioning and increasing customer loyalty.
Protect and Personalize with a Layered Approach to Identity
Today’s digital identity intelligence solutions offer a layered approach to providing insight into all facets of an individual’s true digital identity — spanning user credentials, devices, locations and more. This anonymized, non-regulated data is compared to historical and real-time behavior, point-in-time threat detection, and shared global intelligence. But digital identity intelligence isn’t just about detecting fraud in real-time and stopping it cold. It is also about providing an exceptional customer experience. In a highly competitive marketplace, loyalties will depend on how customers are treated across channels, locations and devices. Before long, the uniquely personalized products and services enabled by this kind of intelligence will redefine success in an industry undergoing massive change.
As companies look across borders for new business opportunities, the digital economy is poised to grow more rapidly than ever. Therefore, those in the insurance industry that have not already done so must prepare for this new reality. A digital transformation will not only empower them to battle their insuretech rivals, but also allow them to increase service offerings, propelling them to even greater success.