Digitization Lowers Costs and Reduces Errors and Omission Risk

Digitization Lowers Costs and Reduces Errors and Omission Risk

Overview: The insurance industry has been slow to adopt digitization of their platforms, and for good reason. But if your agency hasn’t made the change yet, it’s probably costing you time and money. Digitizing processes for quotes, policy transactions, and claims is cost- and time-efficient, meets growing client expectations for DIY online transactions, helps to prevent human error, and provides safety and security in this time of pandemic.

Customers are Looking For Digitized Touchpoints

Technology and innovation move at a faster pace than business practices and company norms; that has always been true. But it’s important to keep up with some innovations or fall behind the competition. At this point, agencies that still haven’t digitized customer touchpoints are probably losing business. Read on to find out why.

Insurance is one of those fields that has long relied on the personal relationship between a client and an agent, so maybe it’s not surprising that the industry has been slow to accept digitization. But in general, customers’ expectations of business relationships are changing.

Recent surveys show that clients are beginning to see web-based communication channels as the most important way of interacting with insurance companies. This makes sense if you think about it. After all, most people are already interacting with many companies through web-based channels and are forging important personal and business relationships that way.

The concept is not new anymore. In fact, Lev Barinskiy of SmartFinancial.com predicted in Forbes magazine that “within the next few years, every step in the insurance consumer’s journey will be a digital touchpoint.”

Already, the average client not only knows how to use digitized touchpoints, but they’re also actively looking for them and may distrust a company that doesn’t have them. Clients want to know that the companies they trust are using up-to-date methods that meet their needs.

Digitizing is Efficient

Potential Clients
Many potential clients are choosing convenience and safety over more personal business relationships.

A simple reality is that paperwork and face-to-face meetings take time. It’s simply more efficient to give customers the digital tools they need to manage their policies online and even take out new policies when needed. Clients like having that level of control over their accounts, but agents benefit as well.

Do-it-yourself transactions save time and resources for both the agent and the agency. This frees agents and agencies to deal with more pressing matters that do require in-person interaction.

And, while it won’t be an issue forever, in this time of COVID-19, the ability to complete insurance-related tasks themselves online provides an essential sense of safety and security for many people.

Digitizing Lowers Errors and Omissions Risk

Lowering E&O risk also falls under the category of saving money and resources, but that’s not all that it does. E&O claims are filed when a client claims neglect, breach of duty, errors, or omissions on the part of an agent or agency. Those claims don’t just hurt your bottom line; they hurt your agency’s reputation.

Digitized records eliminate the need to transcribe paper records or word-of-mouth conversations with clients. They’re not automatically perfect, but they do minimize the risk of error, which in turn lowers your agency’s E&O risk.

To find out more about how your agency can embrace digitization, contact the American Agents Alliance to learn more about membership benefits or E&O insurance.

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