The digital economy holds opportunities and challenges for insurers

Since its inception, the Internet has been a catalyst for connection and growth. As insurers begin to explore new, innovative ways to connect with their customers and partners, they are more reliant on the digital economy and the Internet than ever before. Accenture’s recently published report, Reinventing the Internet to Secure the Digital Economy, illustrates how central the Internet is for businesses around the world.

Ten years ago, 23% of insurers relied on the Internet for their business operations. Today, it’s 100%. Yet the Internet is not sufficient on its own – it has to be underpinned by security and trust. Almost all (92%) of insurance business leaders say a trustworthy digital economy is critical to their organisation’s future growth.

The digital economy is fragile

The rate of digital innovation is outpacing the ability to keep the Internet secure. In the light of new risks and security threats, trust in our digital economy is eroding. Significant potential value now hangs in the balance.

The majority (58%) of insurance companies confirm that their dependence on the Internet is increasing, but so are the risks to their cybersecurity. Only 30% of insurers are confident in the Internet’s security, and this figure is predicted to fall over the next five years to 18%.

It’s time to build a trustworthy digital economy

The key to prosperity and innovation lies in a trustworthy digital economy. An increase in trust will broaden opportunities in the Internet of Things and the Internet as a whole, equating to a cumulative total of US$608 billion in the UK and $5.2 trillion over the next five years globally. For the CEO of a G2000 company, this translates into an estimated revenue opportunity of 3.9%— or an average of $949 million annually—in each of the next five years. Therefore, it is unsurprising that 90% of insurers have recognised that the economic potential of the Internet and the IoT would be unleashed by building a more trustworthy digital economy.

How insurance CEOs can help

Although the rapidly evolving digital economy poses challenges, CEOs stand at a critical inflection point and are perfectly positioned to restore digital trust. For this reason, the influence and actions of CEOs matter. There are three key areas where CEOs should commit to building a more trustworthy foundation to the digital economy.

  1. Governance: By joining forces with other companies, insurance CEOs can define best practice and govern globally.
  2. Business architecture: The digital strategy of a business no longer falls solely in the hands of the CIO or the IT department. CEOs need to have an acute awareness of how their digital infrastructure relates to their business strategy and security. From this foundation, they can connect and protect, using a model run on digital trust.
  3. Technology: By investing in the right technology, CEOs can advance innovation in their businesses and enhance safety.

This is a critical time for CEOs and a defining moment in securing the digital economy. In the follow-on posts in this series, I will discuss in-depth how CEOs can build digital trust in all aspects of their business.

If you would like to discuss how your business can secure its infrastructure in the digital economy, get in touch.

To read the full report, visit this link.

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