Digital insurance distribution is a need with growing online sales, a collaborative ecosystem can ensure business growth as well as customer satisfaction.
Fremont, CA: Covid-19 pandemic has impacted every sector, and the insurance sector had no immunity against it. With the increased dependence of industries on the internet, steady development in related technologies seems like a great solution to reverse the dent that the pandemic has caused. While every major aspect of businesses is transforming, distribution channels mustn’t be neglected.
Higher tendency to make a purchase online
It is no brainer that the pandemic caused a surge in online sales. A study by Facebook indicated a 47% decrease in offline shopping and 30% increase in online shopping. The study also indicated that consumers in Southeast Asia are likely to continue working from home even after the lockdowns are lifted.
Insurance distribution for a digital era
Digital distribution was relevant even before the pandemic had hit, but the pandemic surely has escalated its importance further. This scenario provides a golden opportunity for key stakeholders to modify their operations and move towards digitization. One of the best methods to implement the same is by partnerships and collaborations. Though it is a promising solution, the industries will also face risks in terms of security and protection. And insurance distribution will solve this problem.
In today's world, data is power, and it is largely available. This enables banks and insurers to recognize their customers better with the help of analytics. Insurers can identify the best time to initiate a conversation using these data. Several attackers have realized this already and are trying to use this opportunity. Hence there is a need for the bankers and insurers to change. Digitization is no longer a choice but has become a necessity to remain profitable and relevant. The insurance industry has to keep up with the latest technologies such as AI (artificial intelligence), ML (machine learning), and Big Data. A collaborative ecosystem of these technologies is the future.
How will insurers be benefitted?
The majority of the insurers already believe that their competitiveness will be decided by the type of ecosystems they chose, a fact stated by a study by Accenture. Digital partners can help enable easy onboarding, deliveries, and easy payments without compromising data integrity and security. This also gratifies the customer who can easily access all the necessary information.
The key to achieving this will be to expand digital distribution channels. AXA, the French multinational insurance company, has secured a distribution agreement with Simplesurance, a software that combines online store’s checkout services with product insurance, that lets customers buy insurance with a click.
Factors of Consideration for Ecosystem Players
Not all players of the industry are well suited for pursuing this, but at-scale players can utilize this method to draw some value. This also creates an environment for local as well as regional players to become part of the competition. One not only has to invest in technologies but also has to have a thorough introspection of the business operations to make sure the technology aligns well with the business operations. One also needs to carefully study and recognize the target audience and strategize accordingly.