Insurance market going digital
In today’s world, where everything is developing in a really fast pace, it is not a secret that technology is moving on even faster. We have thousands of devices, applications, programs and solutions to make our everyday life easier, and now it has all come down to the point, where businesses are trying to use digital world to make the workflow easier and better for them and their customers. A really good overview about that topic is written in the report „Transforming Insurance“ released by KPMG in July 2014.
In their words the usage of digital technology will be more strategic and companies will focus on how to enter new markets with it. Their survey says that the increase that will be followed is 108% upon the respondents that have decided to use digital technology more in their business. The research showed that most of the businesses who have it in their future plans are the ones, who want to keep their customers at the heart of everything they are up to. As an example, 69% of the respondents say that their digital strategy is beyond a website, but 37% say that their initiatives are fully aligned to their company’s strategic purposes.
Transforming Insurance believes that technology can help insurance markets meet the challenges that are mentioned above, and also transform their capacity to identify trends, plan, collaborate, and rapidly respond, adapt and thrive. They think that insurers should build four key attributes that are essential ingredients to generate value: focus, efficiency, agility and trust. These four characteristics are necessary to involve their customers in the progress and to also help them face the global megatrends over the coming decades, including demographic, social, environmental and technological change.
KPMG carried out a global research in May 2014 and found out the challenges that insurers currently have and also their aspirations for the future. The most important ones were:
- What it means to be digital and how to operate in a digital world
- How to use the data that the digital world generates
- How to conquer and tame the challenges of the complex web of legacy systems
- How to achieve all of this in a way that keeps the business in the face of increased threats to cybersecurity
- How to attract and retain people needed in order to get started
The main reason why businesses have the above challenges is the fear of data loss and if their data is captured reliably, some are also afraid that the change won’t bring desired benefits. 35% cited that the main reason is legacy systems and the difficulty of integrating data technology into existing systems and operating models. Half of the respondents also said that the cost of the system and privacy are important as well.
One of the reason why businesses are forced to go digital and change their strategies, is the demand from customers. The report brings out that global smartphone sales are now double PC and tablets combined; 34% of consumers now prefer to access the internet by smartphone; consumers spend 4x more time on smartphones accessing apps than the web.
KPMG believes that it is time for businesses to learn how to use their data and get benefits from it. Giulio Della’Amico from KPMG has said: „Insurers handle large amounts of data but few have yet to use that information to excel in customer service or take the next step and use data to create entirely new propositions. The biggest prize is how data can help you sell new services or find entirely new revenue streams“. It is important to learn how to turn strategy into action and this is where investment in data analytics is becoming very important. Although, people have a belief from history that integrating systems and migrating data is very expensive, which means that they are afraid of the change. Gary Richardson from KPMG noted: „We have cloud computing, which creates the scale, elasticity and economic models to store and manipulate data collection engines economically and bring together company data stored in separate silos without large upfront investments in hardware or software“. However, the secret is having a solid understanding of the business and an understanding of each of these factors to bring it all together and make it operational. This is the piece that is often overlooked, the need to bring it all together – technology on its own isn’t enough.
We can also agree with this topic in Insly, where most of our clients reach out to make their workflow better and to move data from papers to the system. Although, there is a fear that the system is too expensive and has hidden fees, which is not correct. They also want to be sure that their data is secure, correct and it won’t get lost. It is a very reasonable concern, because the fear for cybercriminals is something that comes up from time to time. Clients want to be sure that their data is under high security and won’t get in the hands of a criminal, because this is something that companies depend on. This is why Insly is focusing on the security to provide as best service as possible. We agree that the business can’t live on the paper, it has to go digital in order to keep up with the rest of the world.