Digital Transformation in Insurance – Geneva Association
Article Synopsis :
The insurance industry is challenged by wearable tech, driverless cars, chat bots and robo-advisors. Insurers are scrambling to map digital strategies aligned with these emerging trends.
“Digital Transformation in Insurance” from the Geneva Association, a forum for 80 CEOs of global (re)insurers, focuses on emerging digital trends and their potential impact on the insurance industry.
1. Digital transformation in business and society. Five megatrends fueling the revolution are Connectivity, Cloud, Mobility, Big Data and Social Media. These technologies are causing changes in customer behaviour driving heightened expectations from insurance carriers.
2. Digital technologies redefining the insurance value chain. New digital manifestations such as innovative products and services, customized offerings, digital marketing, analytics, robo-advisors, real-time support, eLead generation, usage-based insurance, telematics, digital claims, self-service and mobility services all bring the following:
- Non-traditional competition from FinTechs
- Pressure on prices and margins
- Talent gap
3. Challenges and Opportunities includes increased cyber-security threats and societal resistance due to lack of digital awareness. On the upside cyber insurance and business protection premiums could grow, and the industry should achieve reduced operating costs.
Key Take-aways from the paper include:
- Digitisation influences broadly our business and private life (“Every business will be a ‘digital’ business in the future”)
- Digitisation reshapes the way insurers underwrite, distribute, administer and settle; the whole value chain is potentially impacted
- Digitisation is about client-centricity
- Technology is dramatically improving and big data will become smart data
- New competitors are devising disruptive models that will ultimately scale
- Digitisation offers opportunities for revenue enhancement (e.g., cyber insurance and to narrow protection gaps), as well as cost-reduction
- Coming to grips with these issues will determine a carrier’s long-term relevance
Link to Full Article:: click here
Digital Insurer's CommentsReconfiguration of the insurance value chains brings new competitors and increased pressure on prices and margins. Throw in ease of cross-border transactions and the emerging mismatch of skills and it all adds up to a markedly different insurance market in 2020 than we have today.
InsurTechs are driving much of the disruption, and with over $3.4b in funding and growing, their impact on traditional markets (and players) will only intensify.
Connectivity, Cloud, Mobility, Big Data, and Social Media are major battlegrounds. Insurers lacking coherent business and investment strategies in these areas risk losing out to InsurTechs who deal in them almost exclusively.
Link to Source:: click here