Key Challenges to Growth in the Insurance Sector

By Apac CIO Outlook | Friday, October 09, 2020

FREMONT, CA: Growth in any business is an essential and challenging aspect. However, in recent years, growth in the insurance sector has turned out to be incredibly challenging. Studies have shown that the growth rate in the insurance sector has dropped from 12.5 percent to 5 percent over the last decade. The declining growth rate is a worrisome factor for the industry, and insurance companies need to do everything they can to overcome these growth obstacles. Here are some of the most common challenges to growth in the insurance sector.

Cost-effective Marketing

Agencies are seeing more marketing competition direct from carries, and less support from the carries themselves in the marketing realm. This raises concern about how to stand out when you’ve got less to spend. The solution to this problem is data. The more information companies have about their customers and prospective audience, the better. Increased knowledge enables companies to spend wisely, targeting audience segments and content with the highest ROI for your agency. Marketing automation and CRM software are essential in helping insurance companies collect better data, analyze more effectively, and deliver results faster.

Industry Tech Advances

New methods and mechanisms are emerging each day in the industry in large numbers. The key is to focus on those that matter and attack them first. In a rapidly changing business environment, digitization must be the top priority for all companies. Digitizing processes helps companies to save time and money and deliver better service to their customers. A recent study by Harvard Business Review found process digitization can deliver up to a 65 percent reduction in cost, 90 percent reduction in process turnaround time, and a 20 percent increase in conversion rates. Also, moving to paperless processes means decreased E&O issues. Some of the most used digitization resources include integrated proposal creator, e-signatures, and email in the management system. The more companies can operate without mailing, printing, and faxing, the better.

Customer Barriers to Entry

Insurance is already a hard sell as it’s not seen as a necessity. Add to that a cumbersome underwriting process, and it becomes less likely for leads to convert. Again, paperless or digitized processes and integrated systems will alleviate much of that pain. In addition to paperless and integration, a client portal makes it easier for customers and prospects to do business with an agency.