The results of our recent Digital Innovation survey indicate that insurers’ budgets reflect their commitment to digital transformation. Carriers in the life insurance and annuity sector intend to invest $40 million through to 2017, and P&C carriers plan to invest even more, at an average of $47 million. Our analysis suggests that’s approximately 0.2 percent of their premium income a year on digital initiatives.
When insurers invest in digital, they typically focus on:
- Increasing sales and improving sales efficiencies through existing channels (64 percent).
- Digitizing existing processes and operations (56 percent).
- Developing customer-centricity and personalization capabilities (39 percent).
These areas of focus are a logical response to the difficult current macroeconomic environment in the developed world. In fact, greater customer-centricity, enabled by digital technologies, will be the strongest weapon for insurers trying to protect their existing market share.
What do customers want from insurers?
To be truly customer-centric, insurers need to have a better understanding of what their customers want, and they must put themselves in a position to meet those wants. When we surveyed consumers, we discovered they want:
- Greater use of digital (especially mobile) channels.
- Help from insurers to manage rather than just insure risk.
- Highly personalized solutions.
And insurance customers reported that they are willing to share personal data to get these things.
Where will the money go?
With these customer wants in mind, as well as a need to balance short term profit with long term sustainability, 48 percent of respondents said their priority is to invest in open data and big data analytics. Respondents also reported that data and analytics is the most important component of their overall digital strategy.
When asked about investments they have already made, insurers reported they have invested in:
- Mobile communications and apps (68 percent).
- Data mining and predictive modeling (59 percent).
- Social media monitoring (54 percent).
Innovative technologies on the market that fit into these categories and that life and annuity carriers could take advantage of include Accenture’s SmartVideo and Web Recording and Replay solutions, and the soon to be available ALIP Analytics solution which allow insurers to provide personalized customer service based on advanced data analytics.
To learn more about the Digital Innovation Survey, visit Seizing the opportunities of digital transformation and register to download the full report.