Global Digital Insurance Benchmarking Report – Bain & Co
Article Synopsis :
Most established insurers have been slow to adopt digital tools and business models relative to other industries, such as retail, media, travel and retail banking. Meanwhile, a growing number of tech oriented start-ups and young firms continue to chip away at insurance markets.
Digital technologies are raining change on insurance executives — not just in IT
In the “GLOBAL DIGITAL INSURANCE BENCHMARKING REPORT 2015”, Bain compiles key statistics to help insurance executives better understand the state of the industry and guide digital strategy and execution over the next three to five years. To compile the report Bain interacted with 70 insurance carriers across the globe in six key dimensions:
- Digitally enhanced customer experiences
- An omni-channel sales and distribution model
- Optimized operations using digital technologies
- Advanced analytics and Big Data applied throughout the business
- Technology activated to enable digital transformation
- An innovation-ready organization
The report suggests insurers benefit from choosing among four pathways to stage their digital transition (noting none of the pathways is better than another, nor are the pathways mutually exclusive):
- Advanced analyzer – Uses Big Data analytics in various insurance functions (31% of respondents)
- Customer-centric insurer – Obtains deep understanding of customers to create a wow experience (6% of respondents)
- Digital distributor – Promotes omnichannel distribution (20% of respondents)
- Effective operator – Leverages digital to minimise cost and maximise operational efficiency (11% of respondents)
There is an excellent analysis on global digital trends, with the following findings:
- Insurers vary widely in their digital progress, though none is truly digital yet
- P&C companies have made slightly more progress in digitalization than life companies
- For P&C insurers, digital performance varies widely on many dimensions
- Life insurers also vary on many dimensions, but have a slightly lower digital performance, on average, than P&C insurers
- The share of digitally active customers should rise sharply over the next few years
The report also includes detailed C-level research on:
- Digitally enhanced customer experiences
- Digitally enabled sales and distribution
- Optimizing operations through digitalization
- Advanced analytics and Big Data
- Digital technology as an enabler
- An innovation-ready organization
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Digital Insurer's Comments
The pervasive penetration of digital into every aspect of insurance, including products, services, and distribution, is arguably the greatest force of change for today’s carriers. That said, most carriers struggle to chart a clear path for digital transformation, much less execute it effectively.Most attempts at digital transformation are left to the IT department and not driven strategically from the CEO on down. As this report indicates, insurance executives are beginning to see technology not as an autonomous department or a fad but a core competency woven through the fabric of the entire business.
Turning products and services into digitally accessible solutions and transforming customer interactions into engaging, customer-centric ‘wow’ experiences is the new formula for brand-building in the digital age.
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About the Author
Hugh Terry
Founder, TDIOther articles
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Hugh Terry
Founder, TDI
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