Article Synopsis :
With the rise of new technologies and non-traditional competition, the insurance industry is in a state of flux. Changing regulatory and macro-economic environments are also putting additional pressure on insurer financial performance.
“Insurer 4.0: Turning change into an opportunity” by PWC discusses the drivers of change in the insurance industry and provides key insights to shape strategic thinking and convert challenges to opportunities.
The paper is organized around five ‘Thesis’ points, i.e., key developments and their estimated impacts:
1. Customer focus: Customers want more than just mass-produced products.
Insurers need to proactively offer custom-tailored insurance solutions via an omni-channel experience and build agile IT systems and environments to handle changing technologies.
2. New services and solutions: As society evolves, customer needs change.
Sensors and telematics are opening up new avenues. Insurers should try to leverage the new technologies as early-mover advantage is key against traditional and non-traditional competition. Benefits include increased retention, new revenue streams and higher ROEs, given that the services are typically not capital intensive.
3. Digitisation: New opportunities through partnerships.
The lines separating industries are blurring. Sector experts do not hesitate to cross-collaborate. Insurers need to take a clear stance, collaborating more and building non-traditional strategies to create new products and services. Continuous evolution is key to meeting customer needs and tapping into new markets.
4. Talent: Technologically savvy communicators take the place of data administrators.
Digital disruption is creating pressure to change existing corporate cultures. Going forward, the workforce will spend less time handling data and more time on customer communication across all channels.
5. Regulation: Automation makes it easier to adapt to new regulations.
Insurers must build smart data architectures with structured and centralized data availability. These architectures should be flexible and able to generate requisite reports for regulators whenever required.
Evolving customer needs combined with digital, economic and social changes make it imperative for insurers to study and evaluate options, proactively identifying opportunities and capitalizing on them in a targeted manner.
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Digital Insurer's CommentsCustomer centricity, new services and solutions, digitisation, talent, and regulation. This paper hits all the high notes for insurers striving to lead in the digital age. One insurer’s disruption is another insurer’s competitive advantage -and and in this new world you need not be an insurer per se to compete.
Insurance always has been and always will be a people business and digital doesn’t change this—but it does change the way you reach and connect with people. And it changes the way you hire and recruit, and compensate and incentivize, the people you’re going to need to power your organization moving forward. Viewed one way, digital changes nothing. Viewed another way, digital changes everything.
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