Sixty-one percent of insurance executives plan to sell new products/ services in emerging markets—but only 28 percent of insurance executives see technology as an enabler of growth.

A lot of the optimism shown by insurance executives for 2014 is based on their above-average belief that emerging-market growth will continue to be strong or stable. Sixty-seven percent of those surveyed for The Economist CEO Briefing 2014 for the insurance industry feel this way. By contrast, 43 percent of the sample across all industries saw growth as slowing in major emerging markets.

The BRIC markets (Brazil, Russia, India and China) tend to be less favored by respondents, with Asia generally a prime focus.

Consequently, emerging markets outside of the BRICs are a focus of investment for 62 percent of insurance respondents.

I was particularly struck by the finding that insurers are looking to acquire new customers in both mature and emerging markets by offering them new products and services. This growth strategy is more pronounced than in other industries. For example, 61 percent of insurance executives plan to sell new products and services to new customers in emerging markets; only 45 percent of banking executives are taking the same view.

Reaching these customers, particularly when it comes to personal lines in both life and P&C, will require a high (and growing) measure of digital sophistication. Consumers generally, and consumers in emerging markets particularly, have a high propensity for transacting with their insurance providers digitally (which often means via mobile channels)—and they will switch providers to get what they want.

The Digital Insurer: Playing to win
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(These observations are prompted by the findings of the 2013 Accenture Consumer-Driven Innovation Survey—and you can use our new online data-visualization tool to look at country-specific views.)

As is becoming increasingly obvious, a hefty proportion of emerging-market growth is to be found in microinsurance, where digital, especially mobile, technology, is key. Read Big opportunities in small-ticket insurance to explore this issue.

But here’s the perturbing thing: the CEO Briefing research data seems to indicate that insurers view technology as a way to gain efficiencies to support cost-cutting initiatives. Two-thirds (66 percent) of insurance executives say that technology’s main role is to enhance operational efficiency (much higher than the cross-industry average of 59 percent), while only 28 percent see its main function as a growth enabler.

I worry some of these executive may be missing the boat. Our point of view is that the opportunity offered by digital transformation only begins by doing the same things more efficiently, but that the real benefits come from gaining new flexibility in order to achieve high performance in a rapidly changing customer landscape.

Read the blog series by my colleagues Jean-François Gasc and Thomi Meyer to explore the concept of digital transformation and what it really means. Meanwhile, next week, I’ll look at some of the emerging markets that insurers might be considering.

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