What does it take to build a future-proof insurer?
In a report on the insurance industry released last year, Forrester Research predicted that products, payments, distribution, underwriting, and operations will look very different in the next five to ten years. “A number of different business models will be successful, but not all insurers will make it, particularly those slow to adopt digital technology”.
In the light of this trend, a question emerges: what does it take to build a future-proof insurer? We have selected for you three relevant articles recently published on this topic.
Author: Jean-François Gasc, Managing Director of Insurance Strategy for Europe, Africa and Latin America. Accenture
Date: January 2021
First, no matter what this year will bring, insurers will need to align their businesses “to the changing needs of their customers and deliver new, potentially lucrative, products and services,” according to Jean-François Gasc, Managing Director – Insurance, Strategy Consulting, EALA at Accenture.
The author also makes up a list of 10 trends with potential significant impact on the insurance industry in 2021. Here are the top three:
- Surge in health and wellness services
Customers’ concerns for health increased during the pandemic. “Carriers that quickly establish a strong presence across the health ecosystem will gain a big advantage over competitors”.
- Phygital becomes the standard
Digital services that are seamlessly combined with physical experiences are known as “phygital”. These experiences particularly on mobile platforms, “will emerge as the key differentiator when consumers buy insurance”.
- More insurers venture beyond insurance
Since digital technology is bringing new opportunities for insurers we should expect carriers to announce “some surprising partnerships as they look to broaden their revenue base”.
Author: Chris Maiato, Principal at EY Bermuda and Regional Consulting Leader
Date: November 2020 (originally published by Bermuda: Re+ILS Summer Edition 2020)
Digital technology is part of any future-proof insurer’s strategy to meet consumer expectations and demands. But digital technology “can also improve operations, revenue, compliance, claims and underwriting efficiency, sales productivity and speed to market”, the author points out.
Three take-aways sourced from the article:
- The COVID-19 pandemic has pushed many companies towards digital transformation much faster than expected. But insurance providers, particularly in commercial, have been slow to shift to digital.
- Digital innovation has become critical for acquiring new customers in expanded markets, retaining existing clients, and launching new products or services, all at a lower cost per customer.
- EY’s NextWave Insurance: A large commercial and reinsurance study found that by 2030 the industry could experience US$600bn in revenue growth and 25%-35% improvements in combined operating ratios.
Author: Suresh Muthuswami, President and Global Head, Banking, Financial Services and Insurance Platforms, Tata Consultancy Services (TCS)
Date: August 2020
The $5 trillion global insurance business is being reshaped by digital technology. “However, the limitations of legacy systems, complex and unwieldy operating environments, and concerns about the risks and costs of digital transformation have impeded the industry’s ability to take advantage of these new and emerging capabilities.”
The article also talks about the opportunities for life insurers, investors’ pressure and what did the most digitally successful insurers do to tackle transformation.
Where growth will come from? The article quotes a study that TCS conducted in 2020 on digital transformation at more than 1,000 North American and European companies (including 122 insurance firms), where the insurance companies predicted that the most important driver of their growth over the next decade “would be using digital technology to create greater demand—i.e., to get better at digital marketing and sales. Nearly as important is creating a strong customer experience, especially online”.
This article is part of a series of articles dedicated to the insurance industry. FintechOS talked to leading companies from incumbents and start-ups to accelerators and consultants, to get to the heart of the questions: What does digital transformation look like?
Get actionable take-aways on how to stay on top of industry trends, enhance digital strategies, address current challenges and accelerate innovation: https://finvision.fintechos.com/
Other articles on insurance:
Customer-centricity – A Matter of Cultural Shift
Insurance: What’s On the Horizon?
Life Insurance in the New Normality – Three Take-Aways
How Insurtechs Are Winning Trust
Insurance: The Root Causes of Low Trust
“No Legacy Issues to Deal With”
Claims Management: How To Do It Right
“If Not for the Technology, The Business Might Have Been Shut Down Because of the Lockdown”
Insurance: The Scale of The Crisis
The Greatest Challenge Facing Insurance
What’s In Store For Insurance