4 minute read 25 Mar 2019
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How digital transformation is a game changer for insurers

By

Peter Manchester

EY Global Insurance Advisory Leader and EY EMEIA Insurance Leader

Leader in insurance transformation and strategy. Active interest in new entrants. Uses leading-edge technology to transform the customer experience and insurance landscape.

4 minute read 25 Mar 2019

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The digitally enabled insurers of the future will succeed by putting customers at the core of everything they do.

In today’s fast-paced world of technology, retail giants are fueling consumer expectations for high-quality services on demand. These established players are building trust and loyalty by focusing on customer interaction, analytics, products and productivity. The future of financial services lies in following their lead – making financial well-being a reality for everyone, every day. 

Insurers will play a significant role. They can fundamentally redefine the industry through dynamic and tailored digital offerings that improve the customer experience. This is not as simple as it sounds, since most people rarely interact with their insurer. Engagement is not something that consumers look forward to and many have little or no access to their own risk profile to check whether their coverage is appropriately suited to their needs. 

A revolution in approaching relationships

For the insurer of the future, user experience will be paramount. The ability to build deep relationships by proactively altering the approach that people have toward risk will be a game-changer for the industry. Data, prompts and information will be offered in a frictionless way through the most user-friendly interface – enabling consumers to better assess their overall financial situation. This deeper understanding of risk will also open the door to millions of financially underserved individuals who will be connected and able to manage their risks proactively for the first time. 

Greater knowledge of customer behavior will enable insurers to offer timely, relevant coverage based on individual needs that will support healthier and safer lifestyles. People will receive better value for their insurance, and spend less time recovering from loss events and more time living their dreams. 

Imagine a different world where insurers provide real-time coverage based on a customer’s day-to-day activities. It would be a seamless experience, where every moment matters.

Providing a richer digital experience

As consumers gain a more holistic view of their risk exposure and readiness for the future, providers will be able to suggest whether they are on track with their longer-term goals or if change would be more beneficial. 

Both insurers and consumers will benefit from digitizing processes that will lead to faster and accurate underwriting and claims experiences. As operations are streamlined, artificial intelligence (AI), machine learning and robotics will result in greater efficiencies. Expense ratios will improve and, more importantly, the universe of insurable risks will expand significantly.

Overcoming industry challenges

  1. Digital needs to be at the core of everything and insurers will need to integrate multiple technologies, such as data analytics, AI, cyber and visualization, as well as wearables, telematics  and  connected devices. To do this, insurers need to build and manage partnerships and ecosystems that will provide access to competencies and rapidly become a key source of competitive advantage.
  2. Trust is low in the industry and regulation is tightening around privacy and customer data. Insurers will need to rebuild trust and leverage partnerships to access data and create value for all parties involved while navigating a challenging regulatory environment.
  3. Talent is in short supply and insurers will need to identify, recruit and retain individuals with a different skill set than they have in the past. Existing competencies will need to evolve while making the industry appealing to data scientists and digital specialists. Creating the right organizational culture to thrive in the future would be a key imperative for forward-looking insurers.

How to unlock the value and benefits 

Insurers will need to step up their digital transformation activities if they are to keep pace with their peers. They must define their ambitions and develop a road map to get there. This will require changing mindsets, rethinking operating models and embracing a culture that focuses on listening and engaging with customers.

See how our Global Insurance team helps clients develop the critical skills and capabilities to transform their businesses and deliver the digital architecture to enrich the customer experience

Summary

Providing services on the promises of a personalized insurance experience will require a digitally enabled organization that is agile, nimble and responsive to customer needs. Insurers will have a competitive advantage if they can leverage ecosystems, rebuild consumer trust, and make financial well-being a reality for everyone. 

About this article

By

Peter Manchester

EY Global Insurance Advisory Leader and EY EMEIA Insurance Leader

Leader in insurance transformation and strategy. Active interest in new entrants. Uses leading-edge technology to transform the customer experience and insurance landscape.