Digitisation and insurance risk mitigation: New opportunities to improve customer experience

Ignoring all the policy and product details, insurance effectively comprises a process whereby clients outsource their perceived risks and ask organisations to carry the financial burden in the event that the risk occurs.

This fundamental approach has been at the core of long-and-short term insurance processes for centuries, where clients and insurance organisations alike assess their risks and develop a complementary approach to manage those risks.

Clients identified their perceived risk coupled with the likelihood of the risk being realised and measured the financial impact that the realisation would have on them personally.

Likewise, insurance organisations considered a broader view and, based the likelihood of a risk occurring on statistical models that use demographic information, market data, and other research.

This basic approach has been a key enabler of economic growth, allowing for clients and insurance organisations both to conduct business and accept the risks involved. But in an analog world, not enough has been done to mitigate risk and develop contingencies that can have a positive impact on both the sale of policies and the outcome for the insured. Whereas risks associated with insurance may still feel like holding a bomb with a lit fuse of unknown length, improving technology will make the insurance relationship feel a lot more like handing off that explosive to the bomb squad for safe disposal.

Digitalisation is Changing the Insurance Landscape

With the proliferation of digitalisation, and the sheer amount of information that is now available to both clients and insurers, the world of insurance is starting to take the next step towards modernisation. Whereas organisations ...