The digital revolution has arrived in all industries - and insurance is no exception. In today's competitive market, firms need to recognise and understand that as digital technology continues to transform the economy, years of experience in the industry will not be enough to protect them from digital disruption.
To maximise the potential impact of new technologies, firms will increasingly need to focus on more personal and longer lasting relationships, utilising digital capabilities to better understand their customers' needs.
Understanding the changing landscape
At the moment, traditional insurers risk losing relevance with their customers and falling behind more digitally-minded competitors if they fail to adopt the latest technological developments. The introduction of digital technologies has transformed the user experience, with today's customers now expecting to receive superior, seamless service whenever and wherever they want it, whether they are using digital research to compare policies or using digital channels to check the status of their claims.
Implementing a digital strategy to drive innovation
This shift in consumer demographics has put greater pressure on firms to embrace digital transformation, fearing that a failure to do so could leave them trailing behind their competitors. In many cases, however, the nature of the insurance business makes it difficult for firms to innovate. For example, insurers can often lack insight into their customers, as products are often intermediated. In fact, more than half of insurance customers deal with their insurers just once a year, or less.
As a result, even though firms may recognise the opportunities that digitisation presents, there are clear challenges to overcome. For example, many firms may feel that as the pace of digital innovation quickens, it is becoming even more challenging to keep up and innovate.
Digital Insurance Collective
Think digital is important to your role? Want to learn more about how the industry is embracing rapid change?
Keen to meet other like-minded peers and participate in interactive debates?
You need to join the Digital Insurance Collective! The FREE meet-up group dedicated to waking up insurance! Click here to rise and shine by bringing digital into your world.
This could be due to a lack in internal capacity or time that is needed to support innovation - this is where the assistance of IT providers comes in. While some firms worry that digitisation will involve the complex task of replacing entire legacy systems, more often than not, the most practical path to establish a strong IT infrastructure is by leveraging existing IT assets and applications. By taking this approach, firms can pursue a modernisation strategy that is based on combining existing infrastructure with bespoke solutions, and thus take a low-risk route to better customer service and operational efficiency.
Adapting today for a digital tomorrow
All in all, with the rapid changes in the digital environment, it is vital that firms are ready, willing and able to embrace digitisation if they wish to remain competitive in today's market. In order to achieve this, insurers should collaborate with IT providers who can provide the necessary expertise as well as the speed, accuracy and agility to keep up with the changes that are needed to support the company's growth.
The importance of taking a customer-focused approach and achieving greater operational efficiency cannot be overstated. For instance, by adopting a bespoke solution that can be customised to suit the business' individual needs, firms can leverage their existing IT assets and applications by integrating them with the next generation of cloud and mobile technology - at rapid speed and within budget.
It is important to note that the insurance industry, like many others, is reaching a tipping point. Insurers which have been established without the encumbrance of legacy systems are in a flexible position to solely use digital platforms. These new players are putting pressure on traditional firms to look at new ways of adapting to a changing market. Instead of seeing this as a threat, business leaders should take it as a motivational push to start embracing digital transformation and embark on a modernisation strategy.
Business development manager, Niu Solutions
- Zurich settles two claims from Westminster terror attacks
- ERS owners explore potential sale
- Amanda Blanc makes first appearance as ABI chair
- Over 20 start-ups pledge support for proposed insurtech trade body
- Co-op hits out at software viability in IBM legal dispute
- CBL broker EISL stages management buyout
- Insurance firm director jailed for 31 false claims and Manchester Arena terror attack fraud