Article Synopsis :
In addition to macroeconomic, social, and regulatory changes likely to impact the industry, insurers are coping with digital game-changers including the increased connectivity among household and workplace devices, the rise of autonomous vehicles, and the growing threat of cyber attacks. Add it all up and, according to the “2017 Insurance Outlook” report by Deloitte, insurers must be more nimble to confront emerging uncertainties.
Political, policy, security and regulatory shifts, place a mandate on both P&C and life insurers to cut costs, modernize operations and seek growth through technology adoption.
Insurers can adapt to today’s rapidly evolving customer-centric culture and increasingly technology-driven economy by continually upgrading operating systems, business models, and value propositions. Potential steps include:
Focus on Customers
- Deepen client engagement beyond renewals and claims while differentiating with ancillary services
- Develop new products to meet emerging coverage needs in a sharing, connected economy
- Expand digital distribution and virtual service to cut costs and gain competitive advantage
Focus on Internal Transformation
- Become more nimble and responsive to rapidly evolving market and customer expectations
- Explore potential M&A opportunities to deploy excess capital, create scale, and add capabilities
- Facilitate technology innovation by launching pilot tests and perhaps financing startups
Focus on Technology Adoption
- Treat technology modernisation as a journey rather than a final destination
- Enhance cyber risk management to stay ahead of evolving threats and comply with new regulations
- Drive IoT strategies beyond auto insurance for personalized pricing and risk management incentives
Even with increased digitization, people power is paramount. Human capital still makes the biggest difference in securing a carrier’s future growth and profitability, as companies are going to need talent to replace the growing percentage of those close to retirement age and those with new types of skills — more data scientists, for example.
Customer centricity is also a major factor. The timeworn phrase, “the customer is always right,” perhaps never has resonated louder than it does today, given the lack of brand loyalty and enhanced mobility of today’s web-savvy consumers.
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Digital Insurer's CommentsInsurance markets are moving faster. As a result, insurers of all sizes are trying to get faster, reducing cycle times while concurrently reducing cost. Enterprise speed is the best hedge against an uncertain future.
Insurers are also trying to get smarter, educated by their own data as well as the growing pools of available data from outside sources. But in an increasingly digital insurance world, lack of speed – even more than lack of smarts – kills. In our view, all other things being equal, a ‘less smart’ company that builds in weeks, wins over a ‘more smart’ company that builds in years.
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