Nokia CEO, Stephen Elop, famously used the metaphor of a burning North Sea oil rig to encapsulate the company’s dilemma. It was a clarion call for the company to regain momentum by taking bold action. It could be argued that by waiting too long, Nokia left itself with very few options.
The platform on which insurers are sitting is perhaps not burning quite as strongly, but there is no doubt it is alight. Far-sighted insurers are assessing the profound and sustained changes in customer attitudes and behavior, and taking action now, while they still have time to plan.
Accenture research shows the nature of the change:
- Consumers who are planning to purchase or renew insurance are increasingly likely to use insurers’ websites or aggregators to do so. In fact, 43 percent of those planning to purchase or renew in the next 12 months say they will do so online.
- In the United Kingdom, more than 50 percent of auto insurance has been claimed by online operators, with 31 percent of all P&C insurance in 2012 sold direct on the Internet or via telephone.
- Across the United Kingdom, France, Italy, Germany, Spain and Brazil, online channels will grow faster than other channels; in the United Kingdom, the online channel will account for 70 percent of purchases and renewals in the next 12 months.
- Across all categories (motor, home, health and life insurance) and in most countries, the market share of traditional distribution networks is set to decline
The message is clear: insurance is becoming a digital industry, and customers want to do it their way, not your way! But the path to becoming a Digital Insurer is neither smooth nor short—that’s why high-performance insurers are taking steps now.
To learn more about the dawning of this new digital era and the bright opportunities it is presenting to the life insurance industry, visit P&C Insurance – The Digital Insurer: Change Now to Get Ahead and Life Insurance – The Digital Insurer: Change Now to Get Ahead. (PDFs; opens in a new window).
In my next post, I’ll look at the challenges and opportunities insurers face in relation to digital transformation.