Other parts of this series:
Like other financial services sectors, insurers are now fully on board with embracing digital capabilities to drive greater operational efficiency and reduce costs, as well as realizing benefits from doing so. But insurers are increasingly recognizing two other important benefits from the digital transformation
- Improved employee retention
- Stronger customer loyalty
Employee and customer relationships are key strategy and competitive drivers within this high personal touch industry and are emerging as new focus areas for digital applications. The anticipated return on investment from these digital trends promises to provide additional proof points for the transformational power of digital.
In early 2018, Oxford Economics and Accenture conducted a joint survey of 90 financial services executives from across the globe, one-third of whom represent the insurance sector. The survey reveals valuable insights about insurer-specific digital transformation trends and points to key actions insurers can take to achieve their goals. In this two-part blog series, I’ll highlight key insights from the research and offer a path forward for insurers who want to leverage digital to engage and retain employees while building stronger customer relationships.
What insurers are saying, and what that means
At the highest level, the survey results indicate nearly all insurance executives foresee a digitally transformed insurance industry within the next five years. Consequently, 90% of them have a long-term and company-wide technology innovation plan. But their target is shifting and their efforts are extending well beyond efficiency gains and cost-cutting.
For example, 43% place improving employee retention among their top three digital goals. Many insurers believe artificial intelligence will be very useful in that effort by helping employees do their jobs. Another 40% expect technology investments to improve customer loyalty. Looking ahead, insurers intend to make the majority of their technology investments in people-related digital tools. Artificial intelligence-based technologies that improve client-facing processes (50%) and internal blockchain applications (47%) top the list when it comes to anticipated technology investments over the next three years.
The survey results also indicate future investments in efficiency-driving technology to significantly drop in favor of putting money toward improving employee and customer relationships. For example, 63% of respondents say cloud-based technologies that drive operational efficiency have the most impact on their business today, but only 30% expect that same impact three years from now. Instead, insurers are looking for ways to use technology to retain valuable talent and please customers, key to improving their competitive position.
Looking ahead, and how to get there
Having a vision and achieving it are two different things. Insurers are already familiar with some of the stumbling blocks along the path to digital enablement, and those are compounded by a changing workforce. In my next post, I’ll talk about the challenges insurers face in the next phase of their digital transformation and provide key action points that can help smooth the way.
For more information on how the digital transformation is remaking the insurance industry, please see Insurance: Digital Transformation Remaking an Industry