Insurance
Transformation
The digital financial ecosystem is where today’s informed consumers enjoy a seamless, digitally enhanced experience, allowing them to switch across multiple access points and channels throughout the lifecycle, where rigid products are transformed into personalised and timely digital offerings on digital platforms, using artificial intelligence & automation to complement human interactions and where finance is embedded seamlessly into everyday life. According to the seventh annual global banking survey conducted by The Economist Intelligence Unit in March, 45% of respondents said their strategic response to the crisis was to build a “true digital ecosystem” and 45% of companies are planning to accelerate transformation to re-emerge as a result of COVID-19 [1].
Digital Engagement
Attracting the digital consumer
Customer expectations are being set by BigTech. Digital is the engagement tool of choice. COIVD-19 has accelerated this. According to a recent survey of European insurance firms featured in a recent PYMNTS report, close to 90% have undertaken some sort of digitization initiative to enhance the customer experience and make it easier for digital-first consumers to process claims and manage documents.
Insurers need to understand the customer journey, exploit deep insights and develop a user experience across the customer lifecycle that spans channels, touchpoints and ecosystems.
Delivering end-to-end digital experiences will require the integration of networking, cloud, AI & analytics and security.
Personalised Products
Real-world data pricing
The pandemic has triggered a uptick in usage-based insurance (UBI). UBI has 5% market share but 85% of millennials say they’re open to it [1]. More and more financial & insurance companies are also getting into biometric tracking using smart wearable technology.
The penetration of connected devices will continue to increase rapidly, delivering an avalanche of real-word data. Insurers need to harness this data to develop new products (e.g. real-time, as-needed coverage) and more personalized pricing through improved price-to-risk effectiveness.
Digital Platforms, cloud and the Internet of Things (IoT) will be combined with AI & analytics and security.
Intelligent Operations
Resilient and automated
Most insurers are predicting additional growth in 2022, putting on pressure to scale without adding operating expenses. Straight through processing will allow scale and improve customer. By 2024 more than 65% of insurers will embrace automation [1].
Automating administration, underwriting, claims, & asset management will shift people to higher-value work to reduce cost-to-serve and increase resilience. In five years, the average insurer will have lowered
costs by 25%, while those in the top quartile will reach up to 40% [2].
Digitisation, robotic process automation and artificial intelligence will work alongside a secure digital workplace supporting anywhere working.
Digital Platforms
Simpler to buy and serve
Insurance distribution has experienced up to three years of digital preference acceleration due to the pandemic.
Many insurers have made progress on digitising their own products, capabilities and services but are hampered by legacy IT. Modernised IT can also be 41% lower in cost than legacy systems [1].
Digital Platforms are the core technology that will allow insurers to compete long-term leveraging cloud, AI & analytics and security.
Open Finance Ecosystems
Embedding finance into life
Insurance is connected to the wider ecosystems of Health, Finance, Mobility, Housing, Education and B2B business.
Insurers can learn from BigTech and Open Banking to create new distribution and business models in their wider ecosystems - a $3 trillion market opportunity [1].
Open Finance ecosystems will ultimately provide consumers with integrated financial experiences. 71% of British digital bank customers would be highly interested in embedded insurance offers based on their transaction data, as would 64% of traditional bank customers [2]. ‘Convenience’ is the primary driver stated by 49% [3].
One-to-many API connectivity with market players, is key. This drives cloud, data analytics and security.