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Insurance digitalization and intermediaries: 3 reasons why digitalization is great news for insurance intermediaries

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Many insurance companies fear the reaction of their intermediary partners to their plans for digitization. But contrary to popular belief digitization is great news for intermediaries. Here are 3 reasons why.

1. Most insurance companies still run on insurance software solutions that have very limited capacities for web services and thus support intermediary portals with limited functionality. Huge amount of the administrative work of insurance intermediaries therefore continues to be conducted over the phone and by exchanging information via various channels – from email to chat applications, information that needs a lot of post processing on both sides. The insurance digitization done properly could enable intermediaries to get their tasks done in a much more efficient way online in real time and without the need to contact the back office of the insurer, thus reducing their administrative costs.

2. Many believe that once the insurance industry truly digitizes its processes, the insurance intermediary will lose its importance. Insurance digitization does not exclude intermediaries from the value chain. That is a misconception. The true value that an intermediary brings is the human connection and there will always be customers who prefer to be serviced by people with whom they have developed a trusted relationship. By removing all unnecessary administrative overhead, digitization will enable intermediaries to focus on their actual work – providing a service to the end customers.

3. Insurance digitization opens the door to great new business models and practices which are currently impossible due to technical limitations. The feared change could actually be great for the partners of insurance companies. With the right insurance technology, insurers who want to differentiate themselves can introduce exciting offerings for their intermediary partners. A possible new technology-enabled practice can be the real-time payout of insurance commissions. The monthly or quarterly payment of commissions is a norm due to the difficult administration of all related processes. Once the incoming and outgoing payments, their reconciliation, as well as reporting, are fully automated, intermediary partners can get their earned commissions as soon as their customer pays their premium or gets their contract. And who doesn’t want their earned money in the bank account as soon as possible?

Insurance digitization not only removes a lot of cumbersome administrative tasks but also opens a lot of doors to new and exciting business practices not only for insurers but also for their partners.