Overcoming Internal Barriers to Boost InsurTech Adoption

Overcoming Internal Barriers to Boost InsurTech Adoption

Overcoming Internal Barriers to Boost InsurTech Adoption
Nick Gallo
Apr 28, 2022
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The evolution of digital technology has spurred much of the new development in the insurance sector. The digital transformation in insurance is only just picking up steam, but that doesn’t mean insurers can afford to sit on the sidelines. 

Agencies that adapt to the rapid developments in InsurTech will have significant competitive advantages. Let’s explore how to overcome any internal barriers as you push for InsurTech adoption at your insurance agency.

The State of Digital Transformation in Insurance

Today, the insurance industry is undergoing a slow but steady overhaul thanks to technological advancements. New digital tools and innovations are changing every aspect of the industry, from client acquisition to underwriting.

For example, consumer expectations for convenience and instant gratification are higher than ever. As a result, using technology to enhance the customer experience is one of the most vital areas of competition for the insurance business.

To that end, savvy insurers are using digital wholesalers to quote and bind. Clients get quotes from their agents faster, and the agent gets higher customer satisfaction for providing quick services.

In addition to providing powerful new capabilities, technology is also shifting the most fundamental assumptions of the insurance industry. For example, how drastically will the Internet of Things, like smart buildings equipped with sensors, impact commercial property coverage needs?

Developments like these show that embracing a digital transformation strategy allows insurers to do more than increase efficiency and streamline their systems. They can even put themselves at the forefront of entirely new markets.

What to Consider for InsurTech Adoption?

The benefits of adopting new technologies before competitors can be significant. However, agencies must still take the time to address critical questions before diving into the vast, expanding world of InsurTech, including:

  • How much can we reasonably afford to invest in new technologies?
  • Which areas of our business would benefit the most from digital platforms?

Insurers should identify their weaknesses, opportunities for growth, and capacity for new tools, then look for solutions. Otherwise, it’s too easy to get lost in the sea of options or waste time on technologies that are exciting but suboptimal solutions for your agency’s needs.

When you’re ready to start assessing tools, consider the following for each:

  • What return on investment can we expect?
  • How will this technology affect our cybersecurity?
  • What core functions will this tool impact, and how?
  • How hard will it be to integrate this tool with others?

Remember, it takes time to adjust to new technologies, so answer from a short-term and long-term perspective. It’ll help you set the incremental goals necessary for successful adoption over a realistic time horizon.

For example, say that the primary obstacle to your agency’s adoption of its latest tool is the complexity of the user interface. Some beneficial short-term goals might be to form an implementation team and schedule regular training sessions for the first year.

Common Objections in InsurTech Adoption

Change is always uncomfortable, especially in an industry as well-established and traditional as insurance. Unfortunately, that means you’ll inevitably face some adversity when you push your insurance leaders and fellow agents to adopt new technology.

The objections you’re most likely to hear from agency leaders stem from loss aversion and choice paralysis. They’re usually afraid of investing in the wrong tool. After all, they’re responsible for high-level decisions that impact the whole organization. 

Meanwhile, the objections you’re most likely to hear from your fellow agents stem from inertia or an aversion to change. They’re used to a certain operating model, and new technologies will inevitably disrupt their systems. That can be frustrating, even if it’s beneficial in the long run.

It’s important to acknowledge that there’s some validity to these objections. That doesn’t mean you shouldn’t push your agency toward InsurTech adoption, but consider these concerns before you decide to advocate for any new technology.

How to Overcome Barriers in InsurTech Adoption

Fortunately, knowing ahead of time what objections you’re likely to face from your company leaders and fellow agents makes it easier to ease their fears. Before pitching an InsurTech solution, prepare appropriate responses for their concerns.

For example, you need to show your industry leaders they’ll be investing in the best tool for the agency. If you’ve followed the steps we’ve laid out so far, you’ll already have the necessary data to do so, including:

  • An expected return on investment for the InsurTech and its closest competitors
  • A breakdown of the tool’s impact on cybersecurity and core agency functions
  • An analysis of the technology’s integration capabilities with existing and future systems

Following the appropriate sequence of events also makes it easier to demonstrate the benefits of new InsurTech to your fellow agents. Hopefully, you accurately assessed your insurance firm’s inefficiencies and growth opportunities before choosing a solution.

If so, you can simply walk your peers through the core processes. You won’t have to convince them that the problem exists. Instead, you can focus on demonstrating how the tool is an effective solution.

With your entire organization on board, it’s much easier to coordinate a successful adoption plan.

The Future of Digital Transformation in Insurance

The digital transformation in insurance is approaching full swing, but many exciting developments are still on the horizon. We’ve only just begun to see the impact of technologies like artificial intelligence, automation, robotics, big data, and interconnected devices.

As the insurance industry and the world at large adapt to digital innovations, there will be countless opportunities for increased efficiency and new insurance products. Insurers must at least keep pace with the evolving technology.

Being an early adopter has its risks, but you can mitigate them with the proper due diligence. On the other hand, it can be extremely difficult to catch up with your peers once they’ve gained a competitive edge.

Incorporating new technology is a lengthy process, and you can’t afford to fall too far behind. These innovations compound upon each other, and the growth of the gap between nimble agencies and slow-moving ones will only accelerate as a result.

Start Pushing for InsurTech Adoption

The digital transformation in insurance is well underway. Your agency must act now to get ahead of competitors. Consider which aspects of your business would benefit most from InsurTech, look for viable solutions, and start pushing for adoption.

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