The Digital Insurer In 2015 – Forrester Consulting
Article Synopsis :
Social media, mobile, cloud, analytics and omni-channel delivery are shaking up the traditional pillars of the insurance industry. A burning question facing most insurers today is: How do I succeed in the digital age, staying ahead of the pack, while not squandering resources on trendy projects with no ROI?
In “The Digital Insurer In 2015”, the Forester Consulting team examines how insurance organizations in Germany, the UK, and US are embracing digital initiatives. Conducting in-depth surveys of 200 insurance IT and business decision-makers, Forrester’s key theme is that in order to deliver on their organizational promises, insurance IT and business leaders must collaborate and align on key digital business priorities, technology enablers and processes.
Other findings include:
- Insurance customers have a growing appetite for digital interaction, stoked by digital experiences in other industries (e.g. retail, entertainment). Insurers who meet this ‘raised bar’ will achieve higher levels of customer acquisition and retention.
- Insurance IT organizations will be in the digital hot seat. Revenue will increasingly depend on high-quality digital experience, delivery of which falls squarely on corporate IT.
- Fundamental structural problems threaten insurer digital success. Risk-averse corporate cultures and cost-averse funding models for IT must be overcome.
The report articulates detailed survey findings in the context of five megatrends pertinent to all insurers:
- Effective Digital Strategies Will Drive Insurer Business Growth In 2015
- Disruptive Technologies Will Improve Insurer Financial Performance
- Insurance IT Organizations Will Lead Insurance Digital Transformation Initiatives
- Fundamental And Systemic Insurance Industry Issues Threaten The Success Of Digital Initiatives
- Customer Expectations Will Only Increase, Demanding Ambitious Digital Planning
The report concludes by issuing three firm recommendations to insurers serious about enhancing their digital capabilities:
- Forge cross-company relationships to develop and support the digital agenda
- Leverage big data to create high-value contextual experiences
- Selectively outsource to accelerate the speed of digital time-to-value
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Digital Insurer's CommentsSuccessful digital transformation through the mapping of digital initiatives to business objectives benefits insurers in three ways. First, it delivers superior customer experience; second, it streamlines operations; and third, digitised business models lead to new opportunities for cross-selling, distribution and collaboration.
But there are hurdles. Technology is changing so rapidly that even the most agile insurer, who wants to invest, is often at a loss to decide where. Another challenge is finding the skills and capabilities required to manage more integrated and open IT infrastructures, compared to traditional insurer set ups.
It’s not hyperbole to suggest digital technologies are prompting a re-think of every significant insurance process. Insurers who innovate, leveraging new technologies to re-invent operational and business models, will surely fail in some endeavors, but be better positioned overall to deliver on the high expectations of the increasingly digital insurance customer.
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