Insurers have their eyes on growth. They face significant challenges, as I’ve detailed previously, but many of them have the right strategies in mind, including integration of risk and finance functions.
The scenario is positive, but insurance providers can do more if they look outward at new opportunities presented by technology. Investing in cloud and big data both can bring solid gains for insurance businesses. Many insurers are making the investment, but in degrees that vary. Our High Performance Finance Study, Insurance Report (link) provides additional details.
For example, 37 percent of P&C insurers anticipate their investment in cloud computing and software as a service (SaaS) will change by at least 25 percent over the next two years. By contrast, 61 percent of life insurers are preparing for at least a 25 percent increase in cloud technologies. We see the same distinction when it comes to big data and analytics. Among life insurers, 37 percent expect to increase their investment by at least 25 percent in big data and analytics, compared to 20 percent for P&C providers.
Perhaps because they are dealing with a personalized, human-based product, life insurers are quicker to invest in technologies that can yield a more personalized experience, such as big data tools. Rounding out their digital investments, 21 percent of life insurers predict an increase of at least 25 percent in social media investment, compared to 10 percent for P&C insurers. Similarly, 18 percent of life insurers expect to increase investment in mobile technologies by at least 25 percent, again compared to 10 percent for P&C insurers.
Across the board, insurers have the right vision in mind when it comes to their technology and digital investments. In fact, they are ahead of other industry sectors: Among survey respondents, 85 percent are applying big data and analytics so they can achieve insights that will boost decision making—while only 72 percent of other sector respondents say the same.
Insurers have a tall order ahead of them, given their ongoing focus on growth, the challenges they face, their desire for enterprise-wide functionality and the need to invest in new technologies. My next post will talk about how insurers can put it all together—and how the CFO can play a pivotal role in helping providers reach their goals.