The Shape of Things to Come From Legacy to Digitimacy
Insurance
Discover great opportunities and innovative solutions to add value to the customer experience in the insurance industry.
Introduction
The whole business model of insurance companies around the Middle East is going to change. Insurance companies will need to shift into advisory services and provide proactive and personalized services.
The insurance sector has been a focal point in the Middle East for the last decade, however, now it is going through a massive transformation. The COVID-19 pandemic put a big challenge on banks, creating a sense of urgency and adding lots of financial pressures. Changes in consumer behaviors, digitization and emerging technologies increased the complexity of the insurance industry and the demand for realtime interaction as well.
The insurance sector across the Middle East has been intensified by the governments who push for digital transformation to better serve the customers in the times of the pandemic. As a result, many financial services entities within the region acquire and invest in the technology business.
Source: The Age of With™ Accelerating the impact of augmented intelligence in insurance, 2019
Key Challenges
How Insurance Products are Sold, Serviced and the Usage of Customer Data:
Insurers have been offering general products under one-size-fits-all philosophy while they have been traditionally known for the face-to-face interaction which has been halted. Insurance companies collect huge amounts of data that remain underutilized for further analysis of the customer’s needs.
Incomplete and Shifting Information:
The insurance has traditionally been built on incomplete information. Subjects with similar but unknown risks are put together, and are charged with a fixed premium to cover future liabilities, based on uncertain probabilities. This has been intensified with the spread of the COVID-19, where the information is not only incomplete and uncertain but also is shifting as a result of the constantly changing governments’ measures.
Vulnerable Customers:
Many insurance customers are under financial pressures due to job losses, income reduction or no income. They are also in more need of financial and medical support. Other customers will be opting for reducing their spending by not choosing to purchase new policies, renewing their current ones or renewing them with reduced coverage. Insurance companies under pressure to balance between achieving financial performance and providing community responsibility to the vulnerable customers.
Reduced mobility, on-hold projects:
As customers stay at home, the need for certain policies such as vehicle and travel insurance have been reduced. As many construction projects are on-hold, there is no need for construction insurance.
Paper-Based Environment and Legacy IT:
In the insurance sector, the communication is heavily paper-based and many processes are still manual. However, the need for digital solutions has been increased during the pandemic. Most of the insurers have a legacy IT infrastructure that doesn’t allow the integration of processes, which is hindering the ability of these insurers to respond to this challenge.
Skills Gap and Talent Strains:
Many talents from insurance companies are not skilled to work in digital environments and they are put under strains to work remotely. However, they have no access to the needed information as they are not allowed to visit the physical premises.
