Only Technology Can Save the Tedious, Costly Insurance Industry

By Wojtek Gudaszewski Wojtek Gudaszewski has been verified by Muck Rack's editorial team
Published on December 5, 2022

Aging insurance companies have a customer experience problem, but hope is on the horizon.

When new technology disrupts a legacy industry, it’s usually consumers who demand and drive the change. 48% of insurance consumers think that the insurance industry is lagging behind technology. However, up to 72% of insurance consumers still purchase offline from an agent because they don’t know that online, mobile-friendly insurance shopping is available today.

Anyone who has purchased insurance by phone and a series of back and forth emails knows how slow and difficult that process can be. For the insurance companies that still rely on call centers and salespeople to get customers, the cost of doing business the old way keeps going up, while the customer experience continues to suffer.

The Insurance Industry is Already Perfectly Suited for Automation

The home and auto insurance landscape requires compiling a lot of data and performing many repeatable tasks. That part of the insurance buying process is much better suited to robots, but it’s not just the hundreds of backend processes that can benefit from robotic process automation. Automation can also simplify the ways consumers search for and purchase insurance.

So, why are so many insurance providers behind other service industries in digital transformation? It’s because it requires carriers to rethink how their products and services are delivered.

Over the last few years, fast, contactless digital experiences have become normal when booking a trip, buying a car, watching a film, or ordering clothes. It was only a matter of time before consumers realized that they don’t need to deal with traditional insurance agents to get insured. That time is now.

A Smarter, Faster Insurance Experience is Possible

Online shopping platforms offer customers more options and transparency in transactions than traditional shopping does. While a typical insurance agent might only have 5-10 carriers for a customer to choose from, an online insurance shopping platform can offer customers policies from over 50 top-rated providers in minutes.

Home insurance can be frustrating to purchase over the phone. An offline insurance agent will often ask lots of questions that the customer typically doesn’t have an immediate answer for, such as their home’s distance to a fire hydrant or the exact shape of their roof.

It’s an outdated way of doing business that is completely unnecessary. This data can be accessed from databases and pre-filled to save the customer time. Using a system that leverages the power of technology like Microsoft Azure, a customer needs to only enter their address and an automated system can populate the home data required for a quote–pulled from available information that is already online.

Algorithms can be written to recommend appropriate coverage and compare quotes from multiple carriers. Because these computer scripts are pulling from many more data points than a human can, the customer gets a much more comprehensive and cost-effective experience.

Data is the New Currency

In a technology arms race, the company that can crunch and manage the most data wins. Advancements in programs like Power Platform enable large data sets to be analyzed quickly, so automated solutions can be delivered at scale. One of the biggest technological achievements of the last couple of years has been the sophistication of how the relationships between different data points can be realized and leveraged to benefit the end user.

Technology has flipped the script on how a modern insurance company should be structured. In the old model, an insurance company depended on an army of workers spending most of their time doing manual data entry. This model is expensive and time-consuming. It also makes operating margins slim, erasing any cost savings that could have been passed on to a customer.

In a digital-first insurance company, the data management is automated, leaving licensed agents available to deliver personalized and superior customer service to the buyer. This also improves the working conditions for the agents, of which there are over 169,000 employed in the United States.

Driven by greater efficiency across the board, the new digital-first model of delivering insurance means over half of customers shopping for a better deal or expanded coverage will be able to get exactly the right amount of coverage they need, without any of the unnecessary phone calls and forms they don’t.

What good is having access to technology if it’s not being used to improve experiences for people? It’s time the digital pioneers take this $1.2 trillion industry into a new age.

By Wojtek Gudaszewski Wojtek Gudaszewski has been verified by Muck Rack's editorial team

Wojtek Gudaszewski is a columnist at Grit Daily News who co-founded and built Graviton into the largest microcap investment bank in Poland. He holds an MS in Economics from Wroclaw University of Economics. He is a CFA (Certified Financial Analyst) Charterholder and Professional Risk Manager (PRM). He is currently the COO and co-founder

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