Insurance Digital Transformation: What is the Future of Insurance Technology

The role of digital transformation in the insurance industry

Digital technologies are increasingly present in our everyday lives, and that includes the insurance industry.

As the insurance landscape continues to change, companies are under pressure to not only keep up, but to get ahead. This means embracing modern technology and software solutions that can improve efficiency, enhance the customer experience, and unlock new opportunities for growth.

From artificial intelligence and machine learning to blockchain and big data analytics, these advancements provide insurance companies with powerful tools to refine their operations, tailor their offerings, and manage risk more effectively.

Importance of insurtech in 2024

Insurtech, a blend of insurance and technology, is revolutionizing the insurance industry by integrating cutting-edge technology into traditional insurance models. By 2024, the importance of insurtech cannot be overstated.

Insurtech companies are leveraging technology to streamline and improve the customer experience, making insurance more accessible and user-friendly. For example, mobile apps and online platforms allow for quick policy management, claims submission and processing which are curtuail for modern users. This shift is prove by data and research. For example, according to an EY report, 80% of customers are willing to use digital and remote contact channels, including video, chat, and email, underscoring the demand for digital-first approaches.

In 2024, as digital interaction becomes more prevalent, the importance of insurtech will escalate as it meets the growing demand for immediate, accessible services, making insurance more responsive to today’s consumer needs.

Key digital transformation in insurance statistics

In the dynamic landscape of insurance, digital transformation is making its mark, and it’s underscored by some compelling statistics. Let’s take a quick look at some key figures that highlight the rapid adoption of technology in the industry and its profound impact on efficiency and customer satisfaction:

• Statista reports that the global big data analytics market in the insurance industry is expected to reach $3.6 billion by 2027, up from $1.8 billion in 2019, illustrating the growing reliance on data for risk assessment.
• A survey by Willis Towers Watson found that 74% of insurance companies believe that AI will significantly alter or completely transform the industry over the next three years, indicating the importance of technology in achieving operational efficiency.
• According to a PwC survey, 48% of insurers say that innovation is helping to redefine their processes and products, emphasizing the role of technology in driving product development.

Eight digital transformation trends in insurance in 2024

In 2024, the insurance industry will undergo significant digital transformation. This transformation will be driven by eight key insurance industry trends.

These include the rise of low-code/no-code platforms, the integration of artificial intelligence in insurance. These trends are streamlining operations, enhancing customer service, and opening new avenues for growth, signaling a major shift in how insurers do business in a digital-first world.

Trend 1: The rise of low-code/no-code development in insurance industry

At a time when agility and rapid response to market changes are paramount, low-code/no-code platforms are revolutionizing the way insurance companies develop and deploy digital solutions.

These platforms democratize application development, enabling business analysts and non-technical staff to create or modify software without deep programming skills. This trend is significantly accelerating digital innovation in the insurance industry, allowing companies to quickly adapt to customer needs, regulatory changes, and new market opportunities, underscoring the significant role of low code in digital transformation.

For insurers, the ability to rapidly build and iterate on applications means they can improve customer experiences, streamline operations, and bring new products to market faster than ever before – all while reducing reliance on scarce IT resources and minimizing development costs.

A good example of such a solution is Openkoda, an advanced platform for rapid enterprise application development. Its key feature is its open-source architecture, which solves one of the key problems of low-code: vendor lock-in.

Upon that platform Stratoflow developers built Openkoda Insurance Agency Management System – an innovative, AI-enabled insurance software designed to meet the all key needs of insurance comapnies.

Openkoda Policy Management Software stands out for its innovative low-code approach, allowing for extensive customization and scalability without heavy reliance on the original vendor. Integrated with artificial intelligence, it enhances operational efficiency, automates routine tasks, and facilitates improved decision-making through data analysis.

It out of the box comes with key features like:

• Complete 360° policy overview: Allows personalization of workspace with a central hub for documents, policies, meetings, calendars, notes, and other key functions​​.
• A central repository of policy documents: Supports PDF upload and download, attachment addition, direct printing, storing client policies, and exporting data to Excel or .csv​​.
• Integration with all necessary insurance applications: Extends insurance platform functionality by integrating with a wide range of applications for improved scheduling, process streamlining, and enhanced client experiences​​.

But that’s not all. There’s also customizability.

Thanks to Openkoda’s low-code core this system can be freely and easily customized with additional features with only a fraction of the time and resources required for standard software development. You can think of it as a framework upon which you can create an enterprise insurance application that fit’s perfectly into your company’s needs.

Does it sound interesting?

Check out Openkoda’s full capabilities Today!

Trend 2: Artificial intelligence and machine learning revolution

In 2023, AI has become a major trend in almost every business sector, including insurance.

More and more Insurance Agency Management Systems have already introduced AI-driven tools that automates routine tasks.

Artificial intelligence and machine learning are transforming the insurance landscape by enabling more sophisticated risk assessment, pricing models, and customer service capabilities.

AI algorithms can analyze vast amounts of data from diverse sources, including social media, IoT devices, and historical claims data, to identify patterns and predict outcomes with remarkable accuracy.

In claims processing, for example, AI can automate the verification of claims, assess damage through images, and even predict the likelihood of fraud, speeding up processing times, reducing human error, and improving customer satisfaction.

On the customer service front, AI-powered chatbots and virtual assistants provide 24/7 support, offer personalized advice, and efficiently handle routine inquiries. In addition to improving operational efficiency, these technologies enable insurers to offer more competitive, customized products that meet individual customer needs.

Also, as we’ve already mentioned in the previous point, AI has found its role in low-code development.

Openkoda Insurance Agency Management System features an AI companion – generative AI tool aimed at helping and speeding up the development process of new functionalities as well as providing an innovative way of working with data.

The insurance industry is a field with many vary specific niches. There’s just no way of developing a perfect CRM, or policy management system that would fit perfectly in all business scenarios. That’s where generative AI can provide itself incredibly helpful. What’s more, analysts and brokers can leverage this tool to more effectively process data and present it in visually appealing way.

Trend 3: Leveraging tailored software solutions

The one-size-fits-all approach no longer works in the rapidly evolving insurance industry.

Custom software solutions allow insurers to address specific operational challenges, meet unique customer demands, and differentiate themselves in a crowded marketplace.

Whether it’s developing a Web application that streamlines claims processing, implementing a customer relationship management (CRM) system that provides a 360-degree view of the customer, or deploying an underwriting platform that integrates real-time data analytics, custom software solutions can drive significant improvements in efficiency, customer satisfaction, and competitive advantage.

This trend also includes the adoption of insurtech innovations, where insurers collaborate with tech startups to access cutting-edge technologies and disruptive business models, further enhancing their ability to innovate and stay ahead of the curve.

Stratoflow – Your guides to custom insurance software

Custom insurance software development is critical in the insurance industry to streamline operations, improve customer experience, and adapt to changing market demands.

At Stratoflow, we understand this.

Our team of technology experts emphasizes close collaboration, innovation, and engineering skills to deliver high-performance, scalable data processing systems. Their agile methodology ensures that solutions are efficiently aligned with business needs. With a commitment to open communication and iterative development, Stratoflow is an ideal choice for insurance companies embarking on digital transformation projects.

We specialize in developing custom insurance systems such as:

• Insurance Agent Portal Software
• Agency Management Systems
• Software for Insurance Brokers
• Claims Management Software
• Policy Management Software

Contact us today to discuss your project and find out how we can improve your insurance company’s business efficiency.

Trend 4: Advanced analytics tools

This trend is somewhat related to the previous one, but it’s so important to the insurance industry that it deserves its own point.

Advanced analytics tools go beyond traditional data analysis by using sophisticated algorithms and machine learning techniques to extract deeper insights from data through predictive analytics.

For insurers, this means the ability to better tailor products to customer needs, anticipate market shifts, and manage risk more effectively. In addition, advanced analytics can enhance fraud detection efforts by identifying anomalous patterns and behaviors that deviate from the norm, protecting both the insurer and policyholders from fraudulent activity.

[Read also: Future of Digital Transformation and Trends: Expert View]

Trend 5: The shift in culture from legacy to innovation

Talking about legacy software is always a bit controversial.

On the one hand, these are usually software systems that were built using outdated technology stacks and technologies, and may lack scalability and adaptability. On the other hand, they still provide core functionality to the business.

So what approach should insurance companies take?

The best option is something in the middle – a strangler pattern – gradually replacing existing software systems with new ones without disrupting system operations. By gradually adopting modern IT architectures such as microservices, APIs, and cloud computing, insurers can achieve greater scalability, improve data accessibility, and accelerate the delivery of new services.

This cultural shift toward innovation encourages continuous improvement, experimentation, and the willingness to embrace disruptive technologies. The value it brings is multifaceted: improved operational efficiency, better customer experiences through digital channels, and the ability to respond quickly to market changes and regulatory requirements.

[Read also: Data Modernization in Insurance Agencies]

Trend 6: The growth of insurance telematics

Insurance telematics represents a significant evolution in the way insurers assess risk and price policies.

Using in-vehicle devices or smartphone applications that track driving behavior, insurers can collect real-time data on speed, acceleration, braking, and time of day driving occurs.

This data enables the creation of usage-based insurance (UBI) models, where premiums are tied directly to individual driving habits, encouraging safer driving and offering fairer, usage-based premiums. The growth of telematics in insurance not only provides insurers with a more accurate understanding of risk, but also opens up opportunities for deeper customer engagement, providing feedback and incentives for safer driving practices.

Trend 7: Cyber insurance products are on the rise

As digital threats become more sophisticated, the demand for cyber insurance products has skyrocketed.

These products cover a range of cyber risks, including data breaches, cyber extortion, and business interruption due to cyber incidents. For insurers, the rise of cyber insurance presents both a challenge and an opportunity.

The challenge is in accurately assessing cyber risk, which requires a deep understanding of rapidly evolving cyber threats and the complex nature of digital ecosystems. The opportunity lies in meeting a critical market need by providing financial protection and risk management services that help businesses safely navigate the digital landscape. Insurers are leveraging advanced cybersecurity analytics and partnering with technology companies to enhance their underwriting and cyber risk mitigation capabilities, thereby building trust and expanding their market reach.

Trend 8: RegTech solutions for compliance

Regulatory technology (RegTech) solutions are changing the way insurers manage compliance and regulatory reporting.

As the insurance industry faces an ever-increasing number of regulations, traditional manual processes for compliance are no longer viable. RegTech uses advanced technologies such as AI, machine learning, and blockchain to automate compliance tasks, monitor regulations in real time, and ensure that insurers can quickly adapt to regulatory changes.

The adoption of RegTech solutions delivers significant value by reducing the cost and complexity of compliance, minimizing the risk of regulatory breaches, and freeing up resources to focus on core business activities.

[Read also: 10 Best Insurance Agency Growth Strategies You Must Know In 2024]

5 software solutions in the insurance industry that every professional should know

In the insurance industry, staying ahead means knowing the right digital tools.

Here are five essential software solutions every insurance professional should be familiar with.

From streamlining claims to improving customer relationships, these tools are critical to running an insurance company efficiently in 2024. Let’s take a closer look at how they’re making the insurance world smarter and more efficient for everyone involved.

Customer Relationship Management (CRM) Systems for Insurance Companies

CRM systems are critical for managing interactions with current and prospective customers.

They help insurers gain insight into customer behavior, preferences, and history, enabling personalized service and efficient communication. Popular CRM platforms for the insurance industry include Salesforce and Microsoft Dynamics 365, which offer customized solutions tailored to the needs of the industry.

Policy Administration Systems

Policy administration systems are designed to manage the entire lifecycle of insurance policies, including issuance, endorsement, renewal, and cancellation.

They enable insurers to create and manage policies more efficiently while ensuring regulatory compliance. Platforms such as Openkoda, Majesco and Sapiens offer modular and flexible policy administration systems to meet the diverse needs of insurance companies.

Billing and payment solutions

Insurance billing and payment solutions are advanced software systems designed to streamline and manage financial transactions between insurers and policyholders.

These solutions automate the billing and invoicing process, ensure accurate and timely premium calculations, and support multiple payment methods to accommodate customer preferences.

Claims Management Software

Claims management software streamlines the claims process from initial notification to final settlement. It increases efficiency, reduces manual errors, and improves customer satisfaction by expediting the claims process. Guidewire and Duck Creek are examples of platforms that provide comprehensive claims management solutions tailored to the insurance industry.

Insurance Data Analytics Platforms

Analytics platforms provide insurers and brokers with insights from customer data analysis to help them better understand risk, set premiums, predict trends, and make strategic decisions.

These platforms can analyze structured and unstructured data from multiple sources to provide predictive modeling, risk scoring, and customer segmentation. SAS and IBM offer analytics solutions that are widely used in the insurance industry for their advanced data analysis and interpretation capabilities.

[Read also: Insurance Software: How to Choose the Right One for Small Agencies]

Going custom: the value in insurance software development

The development of custom software solutions offers transformative potential for companies in the insurance industry, particularly those operating in specialized niches.

The one-size-fits-all approach common to off-the-shelf software often fails to address the unique challenges and requirements of specific segments of the insurance market. For example, companies specializing in rare collectibles insurance, agricultural insurance, or cyber risk insurance face unique operational and risk assessment challenges that generic software cannot adequately address.

Custom software solutions can be tailored to address the nuances of these niches, enabling more accurate risk assessment, policy customization, and claims handling. By integrating advanced analytics, AI, and IoT, custom software can provide deeper insights into risk factors specific to each niche, optimize pricing models, and enhance customer engagement through personalized experiences.

For cyber insurance, they can incorporate real-time data on emerging threats and offer dynamic coverage options. This customized approach not only increases business efficiency, but also drives competitive advantage by offering services that are precisely tailored to customer needs and industry requirements.

If you want to know more about the custom software development as a whole we highly encourage you to check out our Custom Software Development Guide for 2024.

We are Stratoflow, a custom software development company. We firmly believe that software craftsmanship, collaboration and effective communication is key in delivering complex software projects. This allows us to build advanced high-performance Java applications capable of processing vast amounts of data in a short time. We also provide our clients with an option to outsource and hire Java developers to extend their teams with experienced professionals. As a result, our Java software development services contribute to our clients’ business growth. We specialize in travel software, ecommerce software, and fintech software development. In addition, we are taking low-code to a new level with our Open-Source Low-Code Platform.