The insurance industry is a very competitive space, with new players constantly entering and exiting the market. To remain competitive and maintain their customer base, insurance companies need to stay on top of changes in their target audience’s preferences. Armed with this knowledge, many insurance companies have realized that they need to embrace digital transformation if they want to stay viable in the future.

 

In fact, a recent research report found that 88% of insurance executives expect artificial intelligence and machine learning to transform their company by 2020. For the majority of insurance companies, this means incorporating digital intermediaries such as virtual agents and chatbots into their sales process. Additionally, many insurance companies have started using messaging apps as a way to better understand who their customers are on a personal level.

What is driving insurance companies to adopt messaging apps?

Many insurance companies are seeing a drastic increase in the number of their customers who are using messaging apps. For example, one study found that 72% of Americans use some sort of messaging app. This spike in messaging app usage has prompted insurance companies to start using messaging apps as a way to interact with their customers. Why? There are a few key reasons why insurance companies are increasingly turning to messaging apps to communicate with their customers: - Users want a single-source of communication.

 

The rise of messaging apps has coincided with an increase in people wanting to use a single source of communication. People are becoming increasingly frustrated with having to sign up for multiple services and carrying multiple devices that allow them to communicate with friends and family. - Digital preferences are changing. Millennials are now the largest age group in the United States, and they are digital natives that prefer to communicate via messaging apps.

 

If an insurance company wants to remain relevant to this age group, they need to be using the same communication channels.

How Messaging Apps Help Assess Losses

One of the main challenges of insurance is determining the extent of the loss. After all, no two accidents are the same, and assessing damages is a complex process. To complicate things further, insurance companies must balance speed with accuracy in order to minimize losses and maximize coverage.

 

For example, if a car accident occurs, the insurance company needs to assess how much the damages are worth. Then, they need to figure out how much coverage the policyholder has and what the policyholder will have to pay. - No two accidents are the same. The first step in assessing losses is to understand the type of accident that occurred. Did the policyholder hit a car, or did the car hit them? Did the accident occur on a highway or on a city street? Did the accident occur during the day or at night?

 

These are just a few examples of the type of questions that an insurance company must ask themselves when assessing a policyholder’s losses. - Speed vs. accuracy. On one hand, an insurance company wants to be as accurate as possible when assessing losses.

 

After all, they are responsible for compensating policyholders based on the value of their loss. On the other hand, an insurance company also wants to be as timely as possible. Why? If a policyholder’s car is totaled, they need to know how much the value of their car is as soon as possible. Otherwise, they will be left without transportation, which could negatively impact their daily lives.

How Messaging Apps Help Determine Premium Rates

Another important aspect of the insurance sales process is determining the premium rates for customers. After all, insurance companies need to make sure that they are charging customers enough to make a profit, but not so much that they are not competitive in the market.

 

By determining the premium rates, insurance companies can make sure that they have sufficient funds to pay customers if they need to make a claim. Unfortunately, many insurance companies have not been able to effectively determine premium rates due to a lack of information about their customers.

 

Once again, millennials are largely responsible for this issue. Because this generation has tended to be skeptical of sharing personal information with companies, they have made it difficult for insurance companies to determine premium rates. Unfortunately, it is almost impossible for an insurance company to gauge the riskiness of covering a policyholder without having some type of insight into their health and lifestyle.

How Messaging Apps Help Solve Claims

Another important aspect of the insurance sales process is solving claims. After all, people are most likely to purchase insurance in order to protect themselves from unforeseen life events, such as car accidents or natural disasters. Therefore, if an insurance company is not able to solve claims in a timely and accurate manner, they risk losing customers.

 

Again, millennials make it difficult for insurance companies to solve claims. This is largely because this generation has a distrust for the insurance system in general. While it is true that some insurance companies have been less than fair when paying out claims, this does not excuse millennials’ distrust. However, millennials do have a point. According to a study, the average person has to wait 64 days before receiving payment after filing a claim with their insurance company. This is far too long of a wait, especially considering that many millennials are living paycheck to paycheck.

Conclusion

The insurance industry is constantly changing, which makes it crucial for companies to keep up with current trends. This is especially true in relation to customer preferences; if an insurance company does not understand what their target audience likes and dislikes, they will have a hard time staying competitive. By adopting digital transformation and incorporating digital intermediaries such as virtual agents and chatbots, insurance companies can better understand their customers. Additionally, many insurance companies have started using messaging apps as a way to better understand their customers on a personal level. Now that these companies know more about their customers, they can better serve them. This, in turn, will help insurance companies retain their customers, which will lead to increased profits.

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And the best way to ensure that your insurance brokerage stays competitive? Take a look at FloQuote designed to enhance your insurance claims management software.