It’s been too long since my last blog, perhaps an indication of just how much activity there is in the life insurance industry at present. But my new (financial) year’s resolution is to blog more regularly. There are just so many challenges and opportunities that the sector faces, and I hope these blogs will be an opportunity to discuss some of them—to everybody’s benefit!
I suppose the starting point has to be the digital revolution that is set to transform insurance. As the recent 2013 Digital Insurance Survey: Europe, Latin America and Africa showed, insurers are certainly committing fairly large sums to digital transformation: €30 million ($40.6 million) for P&C insurers and somewhat less, €21 million ($28.4 million), for the more-conservative life insurers. Seventy-eight percent of insurers indicated they would be increasing spend in this area.
We believe that this trend is set to build momentum over the foreseeable future, powered by several compelling drivers. I want to explore those drivers in the following blogs, but first I wanted to spell out what digital transformation actually is.
One thing that it’s not is a simple digitization of existing processes. To be sure, many companies have taken the opportunity over the past few years to take advantage of new technologies to streamline what they are already doing and open up new channels online. But in the main these initiatives have typically not affected the underlying business models, nor have they been used as a way to open up new areas of business.
However, this is exactly what insurers in general need to do, Accenture believes. The winds of change sweeping across the insurance industry—as strong as Italy’s Bora, the French Mistral or the Santa Ana winds of Southern California—are going to require bold new action.
The central impetus for such bold action is the move to make the customer paramount, truly the pivot upon which the company turns. In order to achieve this customer-centricity, life insurers have to develop much greater flexibility and this in turn means simpler, more responsive business models and processes—all enabled by digital technologies. Everything else follows from that.
The force of what I am saying will become clearer as we explore together the drivers of this move towards digital. But keep in mind we are talking here about something profound, not just moving what already exists onto digital technologies.
Next time—and not surprisingly—let’s look at the implications of changing customer behavior.