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Pierre Audoin Consultants (PAC), an independent European consulting and analysis firm in the field of software and digital transformation, published its report in June 2018.
The topic : Digital innovation, key insurance issue for 2020.
Sponsored by Effisoft, a French international group that designs software solutions for insurers, this report describes the situation and how the gradual integration of digital technology into the insurance and reinsurance market is impacting its operations.
3 key points are addressed :
- Redesigning the customer journey through digital technology
- New digital-based services and offers
- The switch to robotization
Insurers have had to rethink their organization and
operations in order to adapt to the digital environment. These innovations have
increased competition in the
insurance sector, which has seen the arrival of online comparators and Insurtech.
More focused on
customer orientation than on their internal transformation, more than 1 in 3 insurers are now thinking about
the evolution of their business model.
The maturity of insurers’ growth in their digital approach
means that PAC forecasts a 4.8%
growth in the market for digital software and services in insurance by 2021.
Thus, nearly 50%
of insurers now approach the digitalization of customer relations from a
Redesigning the customer journey through digital technology
Time of awareness
Today, insurers’ customers are increasingly using
different channels. Both physical and digital, tools such as the website or
mobile application are the starting point for customer demand.
Insurers estimate that more than 50% of their customers will combine physical and digital channels
You too have already dealt with these digital channels when you concluded a contract with your insurer or banker. Digital innovations built around the evolution of people’s behaviour have given rise to new technologies such as electronic signatures, teleconsultation, robots and smart contracts. They are the foundation of tomorrow’s insurance.
A necessary evolution
The digital transformation of the insurance sector, which
has become a differentiation tool,
gives a certain importance to its information system.
Customers obviously want a fast and quality service. In
order to make the customer journey evolve and make it more agile, accessible
and ergonomic, the Cloud is the
first lever of this transformation.
PAC then forecasts a 26.2%
growth in the total cloud market by 2021.
The Cloud makes it possible to gain in security and speed, both for the customer and the insurer itself.
insurers are adopting these new digital platforms.
The Cloud allows separate management of legacy and new
systems to ensure the sustainability of internal processes without preventing
innovation and experimentation around digital. Insurers are making progress in
the digitalization of the customer journey by modernizing their information
systems. They are then more proactive
and innovative in the digital world.
New digital-based services and offers
An adapter offer
With the emergence of
collaborative economy offers, new uses have emerged such as car sharing,
carpooling or seasonal rental between individuals.
These new features require short-term insurance contracts adapted to customer needs.
7 out of 10
insurers now offer an offer that covers these new collaborative uses or are
in the process of developing it.
Thus, insurance offers based on user behaviour have
emerged such as “Pay how you drive”. 61% of the French are in favour.
Thanks to digital technology, new services are being
offered to customers such as online
claims management, electronic
archiving or home monitoring.
In order to enrich their customers’ experience, many
insurers are expanding their offerings to offer additional services to insurance.
Thus, 67% of
insurers offer coverage optimization, 66%
offer assistance, 57% offer
prevention and 35% offer
All this digital evolution and the diversification of
offers pose a security and analysis problem. In response to the
dematerialization and democratization of photo editing software, insurers must
protect themselves against the perverse effects of digital technology.
Thus, insurers must implement new technologies necessary
for their service, such as cybersecurity
or data analysis.
PAC therefore forecasts a 9% growth in the cybersecurity market by 2021. (Note: on this topic, I suggest you to read this article regarding the kick-off of the product CyberSolution 360°)
Data exploitation is also a major segment of digital innovation. The technologies of the future are undoubtedly machine learning and predictive data analysis. Based on these digital models, insurers are developing increasingly adapted and innovative offers and services.
The switch to robotization
In its third part, “digital innovation, key insurance issue for 2020” adresses robotization, a new and often feared aspect.
Robotization, a controversy
If robotization is seen as a threat by some, it is above
all a way to automate tasks with low
added value for others.
It makes it possible to improve well-being at work and to offer more fluid and personalized
services to policyholders.
Thus, robotization would provide a better experience for customers.
The advantages of robotization
The main reasons for the switch to service robotization are cost optimization for 59% of insurers and improving the customer experience for 57% of them.
In addition, compliance and fraud prevention are also drivers, since robotization would facilitate the integration of new regulations and the detection of these frauds.
Brakes to robotization
As with any new and innovative project that requires
investment, the obstacles seem to be of a technical and financial nature.
For 85% of
insurers, the age of their information
systems is a problem, as is the technical
complexity for 84% and the high investment cost for 84% of them.
Automation is therefore a major challenge for the
insurers of tomorrow.
Robotic tools and processes
Used by 1 out of 3
insurers, connected objects and chatbots are the main tools for
Other innovations are being tested, such as blockchain in 32% of insurers, robo-advisors
in 36% and artificial intelligence platforms in 34%.
Robotics offers a wide range of possibilities within
insurers’ processes. Contract management
and compensation are at the top of
the list. Then follows the subscription
and the commercial relationship.
at the heart of insurance allows for faster
turnaround times and therefore promotes customer satisfaction with new technologies.
Insurers see digital technology as a unique opportunity to increase their efficiency and that of their employees.
Automation is already an important part of insurers’
business and improves customer relations and experience.
Beyond the economic investments that this implies,
digital insurance innovation will enable market players to promise a better
experience and follow-up to their
customers in the years to come.
To go further than “Digital innovation, key insurance issue”
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