What’s In Store for Insurance Industry As It Enters Post-Digital Era?

The insurance industry is entering a new “post-digital” era where success is based on an organization’s ability to master artificial intelligence (AI) and other new technologies. The post-digital era doesn’t mean that digital is over, but rather that it’s no longer a differentiating advantage — it’s now the price of admission, according to a new survey report from Accenture, Technology Vision for Insurance 2019.

The next big competitive advantage in insurance will be created by the ability to capitalize on “momentary markets,” or personalized policy and service offers tailored to customers’ unique life moments and delivered in real-time, Accenture believes.

The report notes that insurers can now tap into customers’ digital demographics to “deliver hyper-personalized, on-demand services” that meet customers’ specific needs. More than four in five respondents (84%) who participated in Accenture’s Technology Vision survey believe that “digital demographics” give their organizations a new way to identify market opportunities for unmet customer needs.

While the average insurance customer engages with an insurer only once or twice a year, insurers are looking to increase engagement through real-time risk protection and mitigation services. Three in five insurers (60%) are already using technology to build products or services that boost customer engagement, with another 35% planning to so in the next year.

“There’s an opportunity for insurers to increase and improve their touchpoints with customers and forge a stronger, more personalized experience by harnessing customers’ digital footprints, but they’ll need to digitalize their core before they can reach these new heights,” said Daniele Presutti, who leads Accenture’s Insurance practice in Europe.

Presutti contends that most traditional insurers are behind the curve in this “post-digital” world, with a heavy reliance on mainframe technology. “This makes it difficult for them to explore opportunities in the cloud and technologies such as AI to transform their operations, accelerate time to market and improve security,” Presutti said. “It also makes them vulnerable to the early adopters of these technologies as well as the nimbler ‘post-digital’ upstarts.”

Meanwhile, three in five insurers (59%) are forming distribution relationships with non-traditional partners to reach customers in new ways and create new value for them. While this is encouraging, only one-quarter (26%) of respondents know for sure that their ecosystem partners are working as diligently as they are to improve their security resilience. The report stresses that as they collaborate with entire ecosystems to deliver new products, services and experiences, insurers must keep security as a priority.

The report also suggests that failure to master social, mobile, analytics and cloud technologies (SMAC) will leave insurers unable to serve even the most basic demands of a post-digital world and prevent them from embracing the next wave of digital disruption — distributed ledger technology, AI, extended reality, and quantum computing. “This new set of technologies will let insurers reimagine the entire industry and its role in the world,” the report says.

“For insurers to excel in the ‘post-digital’ environment, they’ve got to become more agile and implement SMAC as a core competency before they can rotate to newer technologies, including distributed ledger technology and AI,” said Jim Bramblet, who leads Accenture’s Insurance practice in North America. “They’ll also need to carefully choose the customized and on-demand customer experiences they want to target and work backwards to map out how to get there, determining which ecosystem partners they need and where their place in that ecosystem will be.”

The research process included input from an advisory group of individuals from the public and private sectors, academia, venture capital firms and entrepreneurial companies along with interviews with technology and industry experts and business leaders. At the same time, Accenture Research conducted a global online survey of 6,672 business and IT executives. The insurance industry report is based on responses from 577 respondents at insurance companies in 27 countries across North America, Europe, Asia-Pacific, Africa and South America. Respondents were C-level executives and directors at insurance companies, the majority having annual revenues greater than US$6 billion.

Source: Accenture

Topics Carriers InsurTech Tech Data Driven New Markets Artificial Intelligence Market