Five key customer management trends in insurance, from Gen AI to Non-Life
Across the world, the insurance sector is going through a period of profound change, and it’s happening at great speed. Those in the sector whose customer management approach does not keep pace with this will quickly get left behind and lose share.
On the flipside, that also means there are great opportunities for those that understand the evolution of the market, embrace change decisively, and are ready to transform and innovate.
Konecta has an expert view of the changes emerging in the sector and we are in the forefront of delivering them. With a leading position in CX BPO in the insurance sector, we support around 80 different brands, including disruptive insurtechs, covering the entirety of front- and back-office processes in all branches of insurance. Here we give you our overview of the key trends shaping the sector – trends that every insurance player needs to understand and master.
Trend one: A major cultural shift
It’s often been said that, historically, the insurance sector has been transactional by nature and often slow to adapt. But in our experience, this assessment no longer applies. Among both internal and external stakeholders – e.g. employees, customers, investors, and others – there’s a growing acceptance of the role that new approaches, new technology and new products can play.
Through this cultural shift, the concept of ‘insurance’ is becoming more granular, with offerings such as prevention-as-a-service, usage-based insurance, on-demand insurance, bundled offerings, value-added services, peer-to-peer insurance, micro-insurance and so on likely to become the norm. Already, the meaning of ‘insurance’ may mean different things to successive generations of employees, customers, partners, suppliers and regulators.
This all amounts to an unprecedented opportunity for forward-focused insurers to innovate and re-imagine their businesses to meet customer demands – with the proviso that while transforming their business, they still need to outperform for customers on existing and transitional services.
Trend two: Imperative for ‘humanized’ and seamless experiences
Delivering high-quality, efficient, personalized CX is a must in the industry’s transformation. Providers must move forward from their traditional role as loss payers to becoming empathetic insurers and guardians for customers, say Everest Group analysts.
As in other sectors, customers are increasingly seeking high-quality, customer-centric products and experiences including outstanding service on demand. Brands have to rise to the challenge, optimizing every part of the customer journey to maintain trust, build loyalty and achieve differentiation and relevance.
This is both challenge and opportunity. “Brands must invest in multi-channel digital solutions to simplify policy purchases, improve claims management, and offer personalized services,” says Davide Diemmi Insurance Business Developer & Strategist at Konecta. “We’re here to help them do that, including through our work to enrich offers with non-life branches that end-customers are inclined to pay for, accelerating the creation and configuration of hyper-customizable products, and helping them engage with new opportunities through digital channels in real time.”
Trend three: Innovation and digital transformation infuse everything
The future of insurance is being driven by technology. To compete, brands must accelerate their advanced technologies adoption (including AI / GenAI, data analytics and process automation) to adapt to individual customer needs, provide seamless and consistent digital experiences, enhance the CX, improve decision-making, streamline operations, and optimize risk assessment and operational efficiency.
Not surprisingly, GenAI dominates the conversation: a research report on Global Generative AI in the Insurance Market, by Insight Ace Analytic, found that the market size of GenAI insurance was worth US$575 million in 2023 and is predicted to increase almost tenfold by 2031 to reach US$ 5598 million – a 33.59% CAGR.
However, this should not obscure the fact that there are other key technologies to embrace – such as the use of advanced data for data-driven decision-making. In order to infuse data and intelligence into insurance operations, say Everest Group, brands must partner with AI platform providers to use structured and unstructured data to improve efficiency and effectiveness.
More widely, success in terms of digital transformation requires providers to balance the human component, which remains essential in providing high-value, high quality services, with the latest technologies to provide brand new services: “Konecta’s delivery model involves the integration of specialized human skills in the insurance sector with process simplification solutions and the automation of activities, with the support of AI / GenAI,” explains Paolo Mariottini, Vice President of Sales Digital at Konecta.
Trend four: Mastering the divide between legacy systems and new systems
As insurers pursue their digital transformation journeys, it can be challenging for traditional insurers to modernize pre-existing legacy systems and/or incorporate new tech and AI into them. While some insurers have brought in or merged with insurtechs in order to modernize, there are still significant hurdles to integrate the old and new.
In Italy, the insurtech REVO turned to Konecta as system integrator and partner, to design, implement and deploy its new core insurance system. It wanted a new platform using cutting-edge software architecture to integrate with its existing consolidated platform, including pre-existing back-end components for managing some services such as accounting, compliance and regulatory reporting. Konecta created a fully cloud-based solution, using new technologies like GenAI and blockchain to provide high levels of security, speed and flexibility. The no code/low code platform allows REVO to quickly configure new products or business lines.
Trend five: Significant growth in the non-life insurance segment
Technology and consumer demands are opening the way for innovative products and forms of interaction that consumers may not previously have known they wanted. Like so many aspects of change, this too is both opportunity and challenge.
A glance at some of the practical innovations already up and running – and made possible by technologies such as advanced data analytics, AI and blockchain – provides an illustration of the rapid change taking place in the sector:
- Parametric (or index-based) insurance, paying a predetermined sum when a specific event (such as a natural disaster or a weather event) occurs, without the need to assess the actual damages. This approach simplifies the payment of claims, reduces administrative costs and is made possible through the use of advanced data analytics and blockchain. Using the platform created with Konecta, REVO is now offering this in Italy, for example offering parametric weather insurance to consumers booking an umbrella and/or sunbed on the beach via the portal www.spiagge.it.
- Data from telematics, wearables and IoT, being increasingly used to assess risk in real time. For example, car insurers are using data from monitoring devices installed in vehicles to calculate personalized premiums based on driving behavior, and health insurers are using home telemetry, wearables and apps for monitoring or early identification of chronic conditions.
- Pay-per-use, becoming more attractive to consumers than fixed premiums, such as having car insurance premiums based on the number of miles or hours driven.
Consumer expectations will grow on these products, turning them from ‘innovations’ into standard expectations. Insurers will need to deploy technology and risk management expertise to provide and tailor them, including advanced data analytics, AI and blockchain – with help from providers such as Konecta.
Other trends: From consolidation to regulation
At the same time as managing the digital transformation journeys required to stay ahead of the trends above, insurers also have to keep aware of other industry shifts and pressures.
One of these is consolidation. Mergers and acquisitions are continuing to take place across the insurance sector, driven partly by technology evolution and the need to compete. We expect this to continue.
The other is regulation. Companies in various jurisdictions are already subject to a strict regulatory framework (such as GDPR in Europe) that impacts heavily on commercial practices and risk management. This is unlikely to lighten, given the sensitivity of the customer data that insurers handle, and the severity of cybersecurity threats that businesses face. Innovation will always need to be sensitive to compliance requirements.
Outsourced solutions are essential
As insurers set out to navigate these trends, CX BPO leaders such as Konecta can act as potential strategic partners, supporting insurers and insurtechs through the transformation and innovation programs required to anticipate these trends.
As well as working with insurer clients to create flexible products and to offer process simplification solutions (for example on claims management), Konecta is now operating as an accelerator to support the adoption of new, scalable and future-ready technologies.
According to Andrea Armani, Digital Business Unit Director at Konecta, “Konecta is increasingly called upon to support where companies want to evolve towards value-based models – that is, integrated and end-to-end models that combine the skills, quality and experience of people with the extension made possible by new technologies, such as GenAI, and a complete framework of technical solutions to support them.
“For these companies, Konecta is ready to operate as a partner, providing the technologies necessary for the management of the end-to-end process, from CRM to omnichannel platforms, advanced analytics applications, blockchain etc, as well as digital processes and applications to support continuous improvement.”
As we said above, the insurance trends happening so quickly across the sector bring both challenges and opportunities for insurers and insurtechs. Konecta is on hand not only to solve the challenges but also to support companies to be ahead of the game in capturing new opportunities. If you’d like to know more, get in touch.
