When you compare the changes that happened in different sectors, the digital transformation in the insurance sector is a lot slower than other industries. If you are expecting an insurance digital transformation, it has already begun.
The way people apply for an insurance policy to the process of receiving the benefits has transformed significantly, thanks to the new technology for the change. But, there are many myths and misinformation regarding the digitalization of this sector and these myths affect the people’s decision on selecting the policy of their choice.
These myths are a problem for the public and insurance companies in the long run, and this article will list the top myths regarding the digitalization of this sector.
The myths related to insurance digital transformation are as below:
It is expensive and time-consuming
The insurance industry has been fed the narrative that digital transformation means large-scale programs that take years to implement, half the workforce to manage, and triple-digit million-dollar support costs. This is not the case. The most effective transformations occur in small, incremental steps that move the organization toward a larger goal. Digitizing the insurance industry does not take up a lot of time or a large budget.
Assume an insurer wishes to update its core policy administration platform. There are two options. The first involves the insurer spending excessive amounts of time and money on developing a cumbersome, clunky system. This process is so time-consuming that by the time the system is built and turned on, it is already out of date.
In the second process, the same insurer employs creative thinking. Insurers can create a customer-centric, frictionless, and API-friendly system in a matter of weeks or months by seeking out cloud-native platforms that can be built quickly and configured on the fly.
There is no hefty price tag, and the system provides agility and flexibility. While Rome was not built in a day, the best policy administration platforms were built in five years.
Fact is: Prices of software solutions are reasonable, and installation can be done within hours.
Everything is about technology
Insurance digital transformation is a complicated process. This complication stems from a general reluctance to abandon “tried and true” legacy technology and old-school thinking. Insurance companies will “buy what they know,” which is frequently a cumbersome core system that is expected to solve all business problems.
However, the solution was not designed in this manner. The issue is that insurers are focusing on “technology first” rather than “business first.”
They are purchasing solutions to problems that they may not fully comprehend or be aware of at the time. As a result, the digital transformation strategy becomes all about technology rather than realizing the organization’s growth goals or resolving operational challenges.
Fact is: The software is designed to solve unique problems of the company with the least human interference. The more automated the software, the lesser the workload on employees. And anyone can use this technology without any special training.
Adoption of new technology is hard, and it disrupts other functions
Many digital tools are available today to assist insurers in becoming more prominent, better, and more daring. Contrary to popular belief, implementing new technologies in the workplace is not the most challenging aspect of digital transformation.
Choosing the right tool for the job, on the other hand, is difficult. The ability to do so is determined by those in charge of the transformation and their understanding of the organization’s goals. Change can be stifled and hampered by the wrong mindset and focus.
True transformation is only possible when you deeply understand the business’s pain points, ambitions, and motivations. Without this clarity, insurers may find themselves stumbling around in the digital dark.
Some insurers can envision a clear end goal before embarking on a digital transformation journey. Still, they are unprepared for the journey ahead. Similarly, other insurers will know the path they want to take, with technology to help them, but they will be unsure where that path will take them.
Fact is: The software is easy to adopt because of its simple user interface. The collaborative software is usually similar in operation and doesn’t interfere with other functions. Instead, it assists almost every process of the organization.
Debunking these myths will help the business and customers to participate in the agreements/transactions without any doubts.
