9 minute read 9 Jan 2020
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Five tech trends that will define the future of insurance

By EY India

Multidisciplinary professional services organization

9 minute read 9 Jan 2020

Tomorrow’s insurance leaders must prepare for the adoption of blockchain and big data, the growing challenges of cybersecurity and more.

Dramatic changes are reshaping the insurance industry, and forward-looking insurers aren’t just watching it happen. They are taking action and making investments that will help them become more customer-centric, improve their pricing and create operational efficiencies.

But with so much changing and so much at stake, where are the right areas to focus? Our global insurance team has identified five key issues and trends that should be on the radar for insurance company leaders.

Owner with customer doing mobile payment in plant shop
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Chapter 1

Digital and omnichannel

Are you as customer-centric as your customers want you to be?

Consumers have more complex needs and are more knowledgeable about their choices than ever before. They want personalized offerings and tailored communications – that’s why insurers must digitize services and optimize all interactions.

Three key questions to ask about digital and omnichannel

We’ve identified three key market developments, and the key questions to consider.

Market development 1: Customers want to research and buy products online and expect to communicate largely through mobile channels.
Ask yourself: How do digital and mobile channels help insurers achieve growth and profitability targets by finding new customers and retaining existing ones?

Market development 2: Consumers want more frequent, meaningful and personalized communications.
Ask yourself: Which are the best first steps to close the communication gap and strengthen relationships with unique customer segments?

Market development 3. Agents and brokers want better data and tools on carrier portals to better serve their customers and compete for new business.
Ask yourself: How can insurers build on first-generation agency portals with new capabilities to support the entire distribution management lifecycle?

Highlights from our Global Consumer Insurance Survey

Omnichannel distribution is crucial to improving both the quality and frequency of customer interactions.

  • 75% - Customers very satisfied with current outbound communications from insurers
  • 44% - Customers who have had no interactions with their insurers during the prior 18 months (see details below)
  • 38% - Customers who claim to be advocates but cancel policies or switch providers
  • 80% - Customers willing to use digital and remote channel options for different tasks and transactions

During the prior 18 months, customer reported varying levels of interaction with their insurers.

  • Global total
    56% - At least one
    44% - None
  • Global mature markets
    44% - At least one
    56% - None
  • Global developing markets
    70% - At least one
    30% - None

We can help insurers gain increased customer satisfaction and loyalty, lower costs and greater operational efficiency. Customers gain enhanced experiences, tailored information and faster claims resolution.

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Chapter 2

Big data and analytics

Have you joined the revolution?

Insurers are making significant investments in data analytics and modeling techniques to improve nearly every part of the business.

Three questions to ask about big data and analytics

Market development 1: The Internet of Things (IoT), drones, social media, mobile technology and connected devices have drastically increased the data insurers can leverage across the value chain.
Ask yourself: What are the best ways to collect and manage new data to generate insights and gain competitive advantage?

Market development 2: Although insurers recognize the power of analytics to grow, optimize and protect value, many continue to be overwhelmed by the far-reaching changes required to transition to value-driven decision-making.
Ask yourself: What cultural and organizational changes are necessary to become data-driven and analytics-led?

Market development 3: Leveraging data to improve underwriting and product development will drive revenues and profitability by speeding entry into profitable niches.
Ask yourself: Which functions and processes should be enhanced first?

Sensor data: how insurance innovators and early adopters are improving performance

Sensor technology is a major contributor to big data and will profoundly change the industry. Telematics and other connected devices record driving patterns and can change behaviors. In-home and building sensors monitor environmental conditions and can revolutionize pricing and claims.

Usage-based insurance (UBI): welcome to the new normal

UBI has gained traction because it has the potential to generate substantial benefits, including:

  • 40% reduction in claims cost
  • 40% reduction in policy administration cost
  • More effective policy pricing
  • Substantially lower acquisition costs

We can help insurers improve pricing and boost profitability, enable stronger risk identification and underwriting efficacy and achieve more precise customer segmentation. Customers gain improved pricing, increased responsiveness and tailored experiences created through IoT and sensor inputs.

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Chapter 3

Legacy system transformation

From modernization to mobile to robots – where are you on the journey?

Core insurance systems are being modernized at scale to optimize processes, increase collaboration and reduce costs. “Robots” are software tools that simplify business processes, and the technology behind this development is called robotic process automation (RPA).

Five questions to ask about legacy system transformation

Market development 1: Many carriers have purchased modern, “rules and tools” core systems over the past five years.
Ask yourself: What’s the right level of standardization and out-of-box product capability to reduce total cost of ownership?

Market development 2: With a single line of business or geography up and running, most carriers are looking to extend these tools across the business to leverage their investments.
Ask yourself: How do you demonstrate the business impact of core transformation efforts to scale up implementation?

Market development 3: Insurers embrace outsourcing, robotic process automation and software as a service (SaaS) solutions to reduce costs.
Ask yourself: What's the best way to embrace new technologies to react quickly without extensive recoding and reconfiguring existing systems?

Market development 4: Insurers are investing to extend their core applications and systems platforms via customer-facing and agent-facing portals and apps.
Ask yourself: Which back-office systems can be used to enhance front-line interactions?

Market development 5: Software robots can mimic human actions and automate repetitive tasks across multiple business applications without altering existing infrastructure and systems, while improving productivity, cycle times, accuracy and compliance.
Ask yourself: Which functions or processes are best suited to initial deployments of robotic process automation?

We can help insurers increase profitability, improve pricing and increase underwriting efficacy. Customers get enhanced experience, greater channel access and faster resolution.

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Chapter 4


Are you still vulnerable?

Always-on technology and data-driven operations mean cybersecurity must be proactive and strategic, not reactive and defensive. That’s true for both insurers and potential cybersecurity policyholders.

Four questions to ask yourself about cybersecurity

Market development 1: The number of records stolen in the 10 largest cyber attacks in 2016 rose 124% from 2015.
Ask yourself: How can proactive threat monitoring be used to strengthen cybersecurity capabilities? How can response plans be enhanced?

Market development 2: Cyber insurance premiums are increasing, but at different paces, with large retail and health care players seeing the highest increases.
Ask yourself: How can insurers partner with companies to strengthen cybersecurity practices, in addition to protecting against increased risk?

Market development 3: Cyber insurance growth is constrained by lack of reinsurance options due to challenges in risk measuring, modeling and pricing.
Ask yourself: How can scenario-modeling capabilities be enhanced with new data and analytical tools?

Market development 4: Some leading players are looking to leverage blockchain technology to mitigate risks and manage cyber liability exposure.
Ask yourself: Which emerging technologies have the greatest potential for cybersecurity applications?

Trust and information security: engaging the entire organization

The digital world abounds with opportunities for innovation and value creation. Unfortunately, in the rush to capitalize on these opportunities, many organizations overlook or underestimate risks and fail to take necessary precautions. The flip side of the digital world offers great potential for exploitation by criminals and others wanting to cause trouble.

Our information security survey reveals several key findings around cybersecurity:

  • 16% of respondents believe their cybersecurity approach is fully meeting their needs
  • 59% have discovered “significant” incidents within their organization
  • 75% did not think it was “very likely” they would be able to detect a sophisticated attack
  • Among the top 10 cyberattacks, the number of records stolen more than doubled from 2015 to 2016 (261 million to 586 million)

We can help insurers create stronger protection for key data, reduce brand and reputational risk, and achieve more efficient regulatory compliance. Customers gain increased confidence and peace of mind that their data is safe.

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Chapter 5

InsurTech and blockchain

Does the innovation upside from disruptive technologies outweigh the competitive threat?

InsurTech and blockchain mean significant new threats and more intense competition but also promising new opportunities for collaboration between new and old market players.

Three questions to ask yourself about InsurTech and blockchain

Market development 1: FinTechs and InsurTechs have made significant inroads by designing powerful but focused applications that solve specific problems and deliver high-quality and intuitive digital experiences.
Ask yourself: Which new start-ups are the best candidates for partnerships and/or acquisition? How can partnerships foster more and faster innovation, enhanced digital experiences and greater risk-taking?

Market development 2: Insurers face intense pressure to enhance their anti-fraud and data security capabilities, as consumers and regulators call for increased transparency.
Ask yourself: How can smart contracts based on blockchain be deployed to improve both data security and access among suppliers, partners, regulators and other entities?

Market development 3: Insurers are exploring single global ledgers to achieve capital efficiencies and improve visibility into reinsurance contracts and risk exposures.
Ask yourself: How can blockchain enable more accurate reserve calculation and reduce asset management costs?

FinTech adoption within insurance

Our FinTech Adoption Index shows that the next wave of innovation in financial services is here to stay and consumers are ready to adopt new tools.

Digitally active customers are beginning to use FinTech-enabled solutions:

  • 18% have completed money transfer/payment activities, such as using non-banks to transfer money and performing online foreign exchange transactions and overseas remittances.
  • 17% have used savings/investment tools, such as online stockbroking/spreadbetting, online budgeting/planning, online investments, equity and rewards crowdfunding, and peer-to-peer (P2P) lending.
  • 8% have performed insurance-related activities, such as car insurance using telematics and health care premium aggregation.
  • 6% have performed FinTech-enabled borrowing, including the use of P2P sites.

Blockchain: a three-step path to adoption and maturation

  1. Internal proofs-of-concept: Verify the technology by starting with internal reconciliation of customer data sets and internal claims processing with smart contracts.
  2. Customer-facing processes: Seek partnerships in areas where there is leverage to drive adoption and develop the requisite legal, regulatory and tax frameworks.
  3. IoT enablement: Strategize for the long term; study how sensor hardware can deliver near real-time performance and condition information to enable automated premium adjustments and smart contracting.

We can help insurers achieve more efficient claims management, stronger fraud detection and prevention capabilities, reduced asset management costs, and enablement of big data and IoT initiatives. Customers gain stronger data security and privacy, increased trust and transparency, and faster resolution.

We can help insurers achieve more efficient claims management, stronger fraud detection and prevention capabilities, reduced asset management costs, and enablement of big data and IoT initiatives. Customers gain stronger data security and privacy, increased trust and transparency, and faster resolution.


With strategic investment in these five areas, insurers can become more customer-centric, achieve growth and lower costs.

About this article

By EY India

Multidisciplinary professional services organization