8 Innovation Trends for Digital Insurance – TIBCO Report
Article Synopsis :
In “8 Innovation Trends for Digital Insurance in 2016” TIBCO suggests that after years of anaemic IT innovation in the insurance industry the momentum is dramatically shifting towards digital transformation. The three driving forces are:
- The Millennial Generation – who expect to buy what they want when and where they want, with the ability to find it at the best price.
- Digital Technologies – whose mass adoption is leading to previously unfathomable volumes, velocities, and varieties of actionable data.
- Regulation – all insurance companies must find better and faster ways to meet the ever-increasing demands of the regulatory environment.
Aligned with these drivers, the article provides a crisp analysis of the top 8 trends expected to impact the insurance industry in the near future:
- Digital channels will replace and augment physical channels: Over the next 3 to 5 years digital channels will significantly replace physical channels and 20–40% of physical activities in insurance will be transitioned to digital.
- Millenial preferences will drive application design: The new insurance customer demands information and service on mobile devices and the web, requiring a completely different application user experience design.
- Embrace and extend legacy insurance IT infrastructure: For example, one hot technology trend is the use of in-memory data grids to move and cache back-office data for new, innovative, digital applications.
- The rise of digital customer relationship management and digital integration: Modern insurance call centers must have a seamless, real-time, 360-degree view of social media engagement, mobile application interaction, and geo-awareness from sensors making up the Internet of Things (IoT).
- IoT increases the need for streaming analytics to innovate: Insurers are capturing new streams of data from the “Internet of Everything.” How will they monetize and manage this data?
- Increased focus on algorithmic risk assessment: Insurers are using continuous algorithmic analysis to continuously search for sales opportunities, manage risk, and ensure subscriber loyalty.
- Driverless cars pose new forms of risk: Risk management will not be the same in the digital era—not only in terms of forecasting, but in managing and mitigating risk in real time.
- The new digital Data Scientist steps to the forefront: New talent is required to seize the opportunities outlined in the first seven points.
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Digital Insurer's CommentsRapid digital adoption combined with changing preferences of Millennials is pushing the insurance industry in new directions.
Most of the trends are technology driven with low market penetration to-date. Insurers capitalising on the time lag in mass adoption to prepare themselves will emerge as market leaders in the long run.
Insurers must leverage new technologies, significantly changing how they evaluate and invest in same. IT funding formulas aimed at ROI around cost reduction fail to capture the upside magic of new technologies designed to capture revenue.
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