5 ways digital identity tools enable the insurance sector's transformation

Considered one of the more traditional sectors among financial services institutions (FSIs), the insurance industry is working hard to adapt to today's digital-first world. From embedded insurance to customer support chatbots to Insurtech, many technologies are transforming the customer journey. Paper-based documentation is gradually making way for digitised insurance processes, and insurance brokers are reassessing their roles as they compete with new digital distribution channels. 

First and foremost, digitising insurance requires the creation of secure and verifiable digital identities that meet mandatory due diligence and Know Your Customer (KYC) requirements. Without them, any meaningful transformation to digital-first operations is unlikely. Creating secure digital identities becomes more crucial as regulations controlling data management and ICT systems in FSIs in the EU continue to rise, and as cybercrime and security breaches become increasingly sophisticated. 

While their road to abandon analog procedures and paper-based evidence is still long, insurance companies can already make use of specialised digital identity tools to digitise, secure, and significantly speed up client verification and KYC processes. Some of those tools, such EU-based itsme^®, also integrate an array of other services, such as authentication, qualified e-signature, and secure data sharing. 

Below, we share 5 ways in which digital identity tools can support insurance companies in their digital transformation:  

The foundation to digitising insurance processes is having the means to reliably conduct identity verification and KYC when onboarding clients. This is especially crucial as cybercrime and fraud are on the rise.  

Fortunately, there are several certified and regulated digital identity platforms that insurance companies can rely on to digitise their KYC and due diligence processes, making them more secure and much faster than manual processes. Digital ID platforms also help insurers streamline compliance with regulatory requirements. This way, insurers can keep their focus on their core operations without the added complexity of staying up to date with evolving regulations or managing data storage and security. 

• First, digital identity providers vary in the range of services that they cover, from identification and authentication to qualified e-signature and data sharing, among others. Being a highly regulated industry, however, insurance will benefit from digital identity tools that cover as many applications as possible (such as itsme^®).

• Insurers also need to consider the certifications that each platform has (e.g. ISO standards or eIDAS compliance), the regulations that they comply with (e.g. GDPR, PSD2), and where they store their data.

• Last but not least, digital identity platforms differ in their compatibility with existing workflows, which influences how they are adapted, integrated, and scaled.

Learn more about itsme^® digital identity platfrom

Insurers often request paper-based documents to process claims, such as signed medical reports, invoices and passport scans. This is done to counter fraud, ensure authenticity and minimise the risk of digital manipulation. However, reliance on physical evidence gets in the way of digitisation, and all the enhanced trust and speed it can bring the insurance sector.

Digital identity platforms can reduce reliance on paper-based evidence when handling claims by serving as a means of digital authentication (multi-factor verification), reducing the risk of fraud when submitting evidence digitally. Other features like digital signatures and secure data sharing services further eliminate the need for paper-based documents.  

Insurance leader AXA has partnered with digital identity app itsme^® to enable its customers to access their insurance contracts, submit claims, and track claim progress directly from their smartphones. Using itsme^®, AXA eliminates the need for passwords or eID card readers, without compromising on security. This also helps AXA, reduce costs associated with paperwork and manual processing, while increasing transparency throughout the claims process. 

To transition to digitised operations, insurance companies need to ensure digitising two key applications: signature and authentication. These processes are essential for enabling a completely digital policy and document management system.  

Digitally signing new policies and insurance certificates requires choosing the right type of e-signature, since not all e-signatures offer the same level of security and legal recognition. Qualified e-signatures (QES) provides the highest level of security and holds the same legal value as a traditional wet signature.  

itsme^® stands out as one of the few digital identity platforms that offer QES alongside a full suite of identification and verification services. Partners in insurance using itsme^®’s QES services include AG Insurance, AXA Assistance, NN Insurance Belgium, and others.    

Digital authentication, on the other hand, enables insurance customers to securely modify policies digitally, authorise policy changes or cancellations, and access policy documents and other official records. Digital authentication safeguards these actions with password-less login that relies on multi-factor authentication, which offers a higher level of security compared to traditional, two-factor authentication (2FA).

Click here to request a tailored consultation with a digital identity expert

When it comes to payments, digital identity platforms further enhance the security of online payments and expand their scope, from authenticating premium payments and verifying claim payouts, to setting up or modifying payment arrangements.  

By authenticating payments through multi-factor, password-less logins, digital identity platforms add an extra layer of security, helping insurance companies integrate online payments with very minimal fraud risk. They also help insurers manage the payment details more efficiently.  

Digital ID platforms help insurance companies eradicate costly and time-consuming physical processes with digitisation, and enable them to utilise the legal instruments prepared by the European Commission to empower the EU Digital Decade. 

Digital identity tools can help European insurance companies comply with key regulations such as eIDAS, GDPR and DORA, by providing secure, verifiable identity management and data protection.  

For instance, by employing highly secure authentication methods and minimising data exposure through multi-factor verification, digital identity platforms enable compliance with the General Data Protection Regulation (GDPR) principles of data minimisation, user consent, and secure data processing. 

Moreover, digital identity solutions support compliance with the Digital Operational Resilience Act (DORA) by ensuring robust authentication and authorisation processes that maintain secure and reliable digital operations. 

Lastly, electronic identification (eID) platforms that also provide qualified electronic signatures help insurance companies to comply with Electronic Identification, Authentication and Trust Services (eIDAS) by ensuring legally binding agreements and compliant transactions across the EU.

Learn more about the role of digital identity in the insurance sector