“One key to surviving in a world of disruption, where the external environment is changing at lightning speed, is to change the game internally.”John Kotter
In a recent survey of insurance consumers, PricewaterhouseCoopers found that 70 percent of respondents conducted some form of digital research before purchasing their policies, 26 percent used a digital medium to purchase those policies, 67 percent would be willing to attach a sensor to their home or car to reduce premiums, and 68 percent would be willing to download and use an app provided by their insurance provider.
Disruptive technologies and the shift in customer mind set is transforming the traditional insurance model. Insurance companies are changing from a product-centric to a customer-centric approach to undergo a full digital transformation. Insurers have begun to utilize customized real time coverage models, and a risk management approach with big data and analytics is critical in the risk selection process.
Insurance has been modeled on product design, pricing and underwriting, distribution, and admin and claims management. This has existed for decades and despite the increase of product complexity, the insurance business is essentially relying on policy premium income and asset management to function.
Emerging Trends in the Industry
- “The Internet of Things”: Insurers increasing utilization of big data to improve claims processing. In addition, trends have been focused on emergence of peer to peer insurance and a growing focus on mobile applications.
- Auto Insurance providers are utilizing technology-based solutions such as vehicle telematics, sideguards, dash cameras and collision avoidance systems to combat the increased losses sustained in the industry.
- Virtual Computing Services, also known as infrastructure platforms, to support multiple operating systems and allow for operational flexibility, function standardization, scalability, and business agility.
- Cyber Crimes have forced insurers to make operational changes to enable them to make better use of data.