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The insurance sector has been known as one of the most traditional and conservative industries for many years and was among the last industries to undergo digital transformation, especially prior to the COVID era. However, we have seen that COVID has finally reached the insurance sector, making it an exception in terms of accelerating the adoption of technology. Some policies imposed by countries during COVID made the insurer have no choice but to do digital transformation.
As we are entering a post-covid era where the market has changed significantly, insurers are facing a situation where the way customers perceive and value insurance products and services is no longer the same. Nowadays, customers are not only looking for a good insurance product provided by a reputable insurer with sound and strong financial support, but are also starting to treat insurance products and services as commodities with the expectation of a seamless and convenient customer journey from onboarding to claim. There is no doubt that insurers should continue to evolve with digital transformation, no longer to overcome restrictions due to COVID, but this time to deal with current and future changing customers. There are a number of benefits that digital transformation can bring to the insurance industry: 1. Customer Retention Digital technology can help insurers better understand their customers through data analytics, where they will be able to develop a more tailored service for their existing customers that CXO INSIGHTS 29 Insurance Business Review MARCH-APRIL 2026 will contribute to customer satisfaction and loyalty. Data capabilities will also make insurers able to deliver a more personal touch with their customers and maximize the multi-channel approach to provide a better customer experience. 2. Customer Acquisition Data technology will contribute to streamlining the onboarding process and creating a seamless customer experience when it comes to product offering, application processing, policy issuance, and premium payment. With digital technology, insurers can even offer self-service to their customers for getting quotations and making purchases anywhere and anytime. 3. Risk Management Since the insurance business is losing money, acquiring a new customer also means accepting a new risk for the insurer. Therefore, risk management capability is paramount to the insurance business. Digital transformation can be a key to improving risk management capabilities. With the help of data analytics and artificial intelligence (AI), insurers will be able to exercise risk and propose a risk improvement in order to fulfill prudential principles in insurance. We have seen how optical character recognition (OCR) is being used in the insurance business nowadays; however, we believe more technology will come in helping insurers do their roles in risk management and risk selection. ”Customers nowadays are not only looking for a good insurance product provided by a reputable insurer with sound and strong financial support, but instead they are also starting to treat insurance products and services as commodities with the expectation of a seamless and convenient customer journey from onboarding until claim.” 4. Processing Automation The insurance industry necessitates a significant amount of administration and operations work, some of which is repetitive, such as policy issuance and claim payment. Robotic Processing Automation (RPA) can be a solution for handling repetitive work to make the process faster and more accurate. With the help of machines, insurers can develop a system to do the underwriting process, especially for simple but frequent risks as well as claim processing. 5. Fraud Detection One of the issues facing insurers for decades has been how to deal with fraud cases and fraud prevention. Developments in the economy and technology at the same time also increase the complexity of fraud acts, including in insurance. With the help of digital technology and data analytics, insurers can develop artificial intelligence (AI) to detect fraud as well as select good customers. 6. Product Innovation In the era of changing customer behavior, offering a product with the concept of one size fits all is no longer relevant. Products need to be tailored to create more value for every customer. We have seen some implementations of the Internet of Things to create a new opportunity where insurers can develop products tailored to each customer, such as pay as you drive and behavior-based insurance in motor insurance products. Parametric insurance is also an example of how technology boosts product innovation in insurance.