Article Synopsis :
Technology is re-shaping customer expectations driving in some cases radical shifts in buyer and seller behaviour.
In response many insurers are revisiting business model(s) and reassessing operational capabilities. “Delivering Successful P&C Transformation” from PwC outlines the steps required to help insurers match the ease, speed and intuitive understanding customers have grown accustomed to in other industries.
Per the report, there are 5 key drivers for digital transformation:
- Change of customer expectation & knowledge: I need products and services that fit my current lifestyle.
- Change of customer behaviour & demand: I need it now.
- Change of regulatory requirements: Transparency and reliable in-depth data on demand.
- Change of ecosystem, competitive landscape & speed of change: New market entrants faster, quicker, cheaper.
- Technological innovations—change of IT models: Cannot wait until IT develops, need it now.
In the age of instant gratification digital is the catalyst for total customer centricity. Technology enables insurers to draw customers close, understanding them better and providing them with the best fit.
The convergence of complex market demands, antiquated legacy platforms and an increasingly mature vendor landscape makes the case for digital transformation at the operational level. Per the report nearly 60% of European P&C insurers have or are currently replacing or modernizing core systems. The implication is the remaining 40% risk falling behind.
The rub is that successful transformation is exceptionally complex and challenging as less than 30% of insurers have managed to complete modernization projects on time and on budget per stated objectives.
Insurers should ask themselves three questions prior to embarking on the transformation journey:
- How can we ensure that our systems choice fits with our long-term objectives?
- How can we ensure that our organisation has the skills to make the most of our investment?
- How can we speed up implementation and future-proof our systems?
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Digital Insurer's CommentsFewer than one in ten P&C (nonlife) policies sold worldwide incorporate sensor data in their pricing. Per this report, a whopping 67% of consumers surveyed say they’d be willing to have a sensor attached to their car or home if it might result in a reduction in premiums, up from 30% just two short years ago.
The delta between insurance products and insurance-buyer preferences is growing at an accelerating rate. Product-minded insurers will surely struggle while experience-minded insurers, we believe, will thrive.
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