Other parts of this series:
Matt Hutchins, Managing Director, Head of UKI Insurance, introduces a new series of future-focused blogs. What qualities will set tomorrow’s leaders apart? And which emerging digital trends will reshape the face of the industry? There’s a common thread. In a digital marketplace, winning insurers won’t just focus on using more technology. They’ll succeed by enabling people (consumers, workers and partners) to accomplish more with technology.
The Digital revolution in insurance is developing at a faster rate than many predicted. Automation is a major driver of operational change…and its impact is set to increase. Recent reports suggest automation technologies will see up to 25 percent of full-time positions in insurers consolidated or replaced by 2025. Others warn that insurance underwriters are in the highest risk category for jobs that will be eliminated by automation (along with claims adjusters, examiners and investigators).
Customer behaviours and market dynamics are being transformed. Recent Accenture research indicates that insurance customers clearly favour firms that provide access to differentiated, relevant products via easy-to-use channels. To measure up, providers must embrace digitalisation enterprise-wide. At the same time, they have to prepare for disruption in key segments. Driverless and automated cars could shrink the personal auto-insurance market by up to 40 percent. Claims would dwindle and premiums plummet.
It’s a pivotal moment for the industry and the choices are clear: embrace digital or fade into irrelevance. Against this backdrop, in the coming weeks I’ll be posting a series of blogs highlighting five emerging digital trends that we believe will redefine the industry.
Showcased in Accenture’s Technology Vision for Insurance 2016 , these trends are collectively shaping a new landscape where people come first. It’s a counter-intuitive message. Tomorrow’s leaders won’t be the firms that have simply invested more and more in technology. They’ll have created new corporate cultures that use technology to enable their people to constantly adapt, learn, innovate and disrupt.
This means insurers are under pressure to evaluate what digital means for their workforce as a strategic priority – and to start developing a digital culture. Leaders will be built for change, with new skills and processes, and whole new ways of working. ‘New IT’ will be a defining feature, with DevOps enabling continual delivery, service-oriented architectures and cloud for scalability, software-as-a-service for flexibility and platforms for collaboration. Workforces will be ready to accept change. Insurers know this matters. Ninety percent of executives say it’s now much more important to retrain the workforce than it was three years ago.
Data is a critical battleground to support insight-driven decisions made across the enterprise. Insurers will have to compete successfully for in-demand analytics talent. They’ll also have to restructure their organisations to take advantage of these new capabilities at every level. Frontrunners in the industry will be equipped to embrace disruption. They will have inspired their people with a vision of how technology enables things to be done differently, and better. They will listen to people, understand their needs and attitudes and, in doing so, play a lead role in creating new ecosystems. Allianz provides an early example of this in action- its alliance with Baidu and Hillhouse Capital Group is leveraging technologies like cloud and AI to transform China’s insurance industry.
Crucially too, tomorrow’s leaders will be digitally risk-aware. Seventy-eight percent of insurance executives agree they are now exposed to more risks than they are equipped to handle as digital businesses. As data proliferates, how firms handle data will have to change. Along with security and privacy, data ethics will be key to building (and sustaining) digital trust. None of these capabilities can be reverse-engineered around a technology. They’ll have to be hard-wired into the development process.
As insurers grapple with what digital means for their businesses, it’s essential that their technology investments don’t get in the way of people. ‘People first’ is the mantra for our Technology Vision . In my next blog, I’ll explore what that means in the context of ‘Intelligent automation’, the first of the five technology trends that is set to redefine this industry.