Sign up and be the first to know

About Hugh Terry & The Digital Insurer

Hugh Terry & The Digital Insurer Video

Contact Us

1 Scotts Road
#24-10 Shaw Centre
Singapore 228208

Write an article

Get in touch with the editor Martin Kornacki

email your ideas at [email protected]

Pre Registration Popup

itcasia2020 Registration Popup

Share Popup

Prime Member: Find out more

Access a unique programme!
  • 56 pre recorded lesson of online content from industry experts over 7 courses
  • The best in digital insurance for practitioners and by practtioners
  • Online MCQ after each lesson
  • Join the discussion forum and make new friends
  • Certificate upon completion to show your expertise and comitment
  • 3 months to complete
  • Normal price US$1,400 Your Prime member price is US$999
  • Access to future versions included in your Prime membership!
Become a member

Prime Member: Contact Us

REach out to us. Please fill up the form below
  • Let us know how we can help. You can expect a response within 24 hours

Harnessing the power of digital in life insurance – McKinsey Report

Article Synopsis :

The digital revolution that has transformed the way consumers buy music, hail taxis and communicate with each other is catching up to the life insurance industry.

 The Digital Insurer reviews McKinsey & Company’s Report on Harnessing the power of digital in life insurance

Many life insurers need to quadruple their investments in digital to remain viable 

“Harnessing the power of digital in life insurance“, from McKinsey quantifies the chronic under-investment by life insurers and suggests most carriers will have to quadruple spending on digital technologies to boost revenue and bottom line against these significant headwinds:

  1. Market penetration has been declining for the past 30 years and real growth between 2005 and 2015 has been negative.
  2. Annual sales of new policies have dipped from about 17 million contracts in the 1980s to ~10 million today.
  3. There’s growing competition from non-traditional players — including banks, wealth managers and brokers — that don’t have an insurance focus and may be looking to steer clients to alternative vehicles.

Per the report carriers must digitally transform each step of their business including:

  • Product development – Creating need-based products with the help of big data and analytics
  • Marketing, distribution and advice – Building capabilities in online advisory and lead generation through analytics and online sales
  • Purchase – Digitization can help solve the delays in underwriting providing consumers with quick turnarounds with respect to policy purchase
  • Service and Claims – Digitization of end-to-end claims saves time and costs with improved accuracy
  • Customer Engagement – Engaging customers with predictive analytics leads to cross-sell opportunities geared to customer needs

McKinsey suggests five core areas for strategic investment:

  • Digital Strategy – Organizations should have a long-term vision for overhauling existing business operations prioritized across three areas :
  1. Digitizing the existing business.
  2. Building digital capabilities that can differentiate their business proposition.
  3. Pursuing disruptive digital innovation.
  • Digital Value Capture – Insurers should target three areas to deliver value:
  1. Building an integrated digital front office.
  2. Digitizing operations and customer experiences.
  3. Creating an environment where parts of the organization can experiment with new business models.
  • Foundational Digital Capabilities – Coordinated investments in IT infrastructure, cloud, advanced analytics and user-friendly experience design
  • Digital Culture, Talent and Organization – Coordinated investments in cross-collaborative teams; structure and leadership, talent and skills
  • Digital Integration Roadmap –  Build an integrated roadmap with clear prioritization criteria and sufficient flexibility

Most established carriers, per the report, fall short in the implementation of digital strategy for lack of a clear vision. McKinsey outlines four models for short and long term planning as a reference in the creation of winning digital strategies:

Link to Full Article:: click here

Digital Insurer's Comments

Why would a carrier commit to a long-term digital vision at the cost of short-term declines in ROE? We can think of four reasons:

  1. Digital insurers serve customers from a wider range of income levels and ages enjoying richer and more frequent interactions with each customer.
  2. Digital insurers know their customers better—including the timing of each milestone in life, from first home purchase to new parenthood, career advances and retirement.
  3. The customers of digital insurers spread the word about fast, personalized service, building trust and brand value.
  4. Digital insurers enjoy reputations helping them attract and retain hard-to-find talent—who help drive new rounds of innovation.

Incumbents who move fast enough in the right directions create significant and lasting competitive advantage. It all starts with strategy which starts with a bold and sustained commitment from the top.

Link to Source:: click here


Livefest 2019 Register Popup Event

Livefest 2019 Already Registered Popup Event

Livefest 2019 Join Live Logged-in Not Registered

Livefest 2019 Join Live Not Logged-in