There are many ways to grow a business, but Cloud Insurance has outlined the five strategies insurance firms can leverage to make the most out of 2022.
The Covid-19 pandemic has been a mixed bag for companies. It has brought tough times for many, but also opened the door of opportunities for many new developments.
According to the International Journal of Environmental Research and Public Health’s study, “The Impact of COVID-19 on the Insurance Industry”, the general trend for the global insurance market during the pandemic was a decreasing profit and increasing claims.
However, now the world is in the recovery phase, the insurance industry is expected to rise. The Swiss Re Institute’s forecast claims the sector could exceed $7trn in premium terms by mid-2022.
In its latest post, Cloud Insurance has outlined the best five strategies to capitalise on this opportunity.
Optimising costs
As insurance companies have restructured into a hybrid or remote working model, there is a greater need to optimise costs, it said. A major way to do this is by shifting away from legacy systems that rely on heavy manual workloads and physical storage and into a modern system.
This means capitalising on digital transformation and using new ways to streamline and reduce maintenance costs. This also helps improve customer experiences.
Digital transformation also helps insurers improve their costs by unlocking the potential for insurance underwriting to become more efficient, Cloud Insurance said. This means automating workflow, implementing straight-through processing and utilising AI to collect relevant information quickly. These cost savings can then be passed on to clients through lower premiums.
Finally, it said digital transformation can help insurers save money by reducing back-office expenses and preventing fraudulent claims from succeeding.
Climate change and sustainability
Climate change will continue to be a big priority for many years. Prof. Dr Peter Hoppe, a board member of the Global Climate Forum recently stated climate protection makes economic sense as it is cheaper than paying the costs for the damage it causes.
Cloud Insurance said, “According to the study, “A Global Review of Insurance Industry Responses to Climate Change” that was published in The Geneva Papers on Risk and Insurance, many industries such as construction, manufacturing, and transport have created innovations to reduce their carbon footprint. Yet, the insurance industry lags behind in these innovations.
“Thus, spearheading green initiatives that proactively tackle climate charge within the insurance market can be a key factor of success for insurers in 2022.”
It continued to state consumers prefer companies that are supporting the fight against climate change and insurance firms involved in this will generate more business.
Customer-centricity
In insurance, customer-centricity means making the entire customer journey experience streamlined and easy. This includes decision-making, purchasing, consumption and after-sales support.
Implementing this means firms can get a competitive advantage by improving customer satisfaction, which could generate more retention and referrals.
Some examples of customer-centric services include customised packages to meet client needs, micro-insurance, and discounts and reward for customers meeting certain milestones.
Strengthened cybersecurity
Cyberattacks are a constant threat, which will never go away. IBM’s Cost of a Data Breach Report 2021 report claimed the average cost of a data breach is now $4.2m. Remote working has contributed to the record-high figure, with average costs of breaches rising by $1bn compared to prior remote working.
With costs rising, firms need to ensure they are protected from any potential attack.
Cloud Insurance said, “With increasing costs and risks to organisations, any insurance business that has adopted or is planning to adopt digital transformation cannot afford to ignore cybersecurity in order to protect their assets and reputation.”
Cloud computing
Finally, cloud computing will be another important part of business plans for insurance firms, with this acting as the glue to all the others, according to Cloud Insurance. It stated the cloud helps store more data than physical records and is cheaper to run.
Having data in the cloud also means it is easier to integrate with other cloud-based industries, supporting innovation initiatives. An example of this at work is leveraging a car’s GPS data via the cloud to give an insurer the real-time data and insights of a customer. With this, they can then build a customer-centric and personalised plan for them.
It said, “Since cloud computing can reduce a lot of costs for insurance businesses, it also makes it easier for insurers to offer affordable microinsurance for those who are excluded from traditional supply. When combined with digital transformation, insurers can also offer microinsurance add-ons that can be purchased through a mobile app as and when a customer needs it. These innovations that result from cloud computing opens up exciting avenues of innovation and growth to continually elevate the customer experience with insurance.”
Cloud Insurance concluded, “With forecasted growth and recovery for the insurance market predicted in 2022, there is no better time than now for insurers to invest in initiating or improving these 5 strategies in their organisations. If you’re an insurer, start buckling up for growth. The ride can be bumpy, but you can make it as smooth as possible by leveraging InsurTech to smoothly shift into digital transformation and cloud computing without having to invest the resources and time to build systems from scratch.”
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