| |December 201819CIOReviewIt is a great thing that insurance companies are finally shedding their stubborn refusal to evolve with time and envisioning a digital future based platforms, middleware, and other digital solutions to dismantle silos, cre-ate a collaborative culture, and accelerate decision making.2. Automation: From business per-spective, automation has helped insur-ance companies drive efficiency, optimize costs, and increase returns on investment. There's far more seamlessness than ever and a greater control over the fast-mov-ing operational workflows. It's a huge tidal shift for an industry, which slipped into decay and saw nothing better than mold growth. With automation, the employees are focusing better on strategic functions and contributing efficiently. 3. Data Intelligence and Machine Learning: Insurance companies need to effectively communicate with the cus-tomers using both physical and digital modes to interpret their behaviors and risk factors. Analytics help insurers build intelligent algorithms and plan service roadmaps for the future. As the systems continue learning more and more information about customer behavior patterns, they imitate response with the help of machine learning and fa-cilitate customer experience that lives up to user expecta-tions. Big Data Analytics is also helping insurers' process historical data and integrate it with new data streams. It generates real-time insights into markets and consumer trends, and optimizes user experience. 4. The Internet of things and Connected Devices: The Internet of Things (IoT), Sensors, Connected De-vices, and Mobile Technologies have simplified data ac-cess to one and all across service chains. Enterprises can use the data from these systems to understand customers better while incentivizing them to drive motivation, and subsequently leverage value for money. This has greatly improved the underwriting processes, and made policies more risk-averse and profitable.Three Key Factors Determining Approaches to Digital Transformation for InsurTechsThe insurance industry faces broader challenges with changing customer behaviors and demographic shifts. In these drastically changing times, it's essential for the insurers to build momentum and develop products that meet or exceed the new-age customer expectations and spur business value. Below are the key drivers that influ-ence approaches to customer technology in insurance.1. Technological Drivers: The growing smartphone and tablet culture, further compounded by cloud com-puting, is enabling fast accumulation and analysis of large amounts of data. Adding more gravitas to it is the rise in the numbers of Internet connected devices and sensors, which is projected to reach 50 billion by 2020. It's a loud testament to the deepened role of data science and analytics in improving the insurance bottom lines. 2. Social Drivers: The demographic changes across the world, like aging population and the retirement of baby boomers, are bringing a host of economic challenges with them. On one hand, the rise of middle class in emerging markets is creating a sig-nificant demand shift for insurance, which is fueling im-pressive business growth. On other hand, baby boomers on their retirement are taking money out from their accu-mulated savings in insurance products, which means tril-lions of money are set to move out in next 5 to 10 years. The rise of Generation Y, who are driven by smartphones and instant communications and want commodity prod-ucts while their coffee is still hot, are also contributing in building a greater need for insurance. 3. Economic Drivers: With the changing digital land-scape, insurance companies are finding new, stable, and growing assets to invest and earn a consistent ROI against long-term liabilities in a highly volatile market. They have new balance sheets, signaling a greater profitability and seamless growth. Moreover, investments in digital tech-nologies have made insurers cater to the customers asking for mobility and speed of service, and thereby, augment-ing their service value. It is a great thing that insurance companies are finally shedding their stubborn refusal to evolve with time and envisioning a digital future. They could easily turn the tables and emerge as real disruptive leaders if they act de-cisively and take risks to change. Amit Grover
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