Insurers lagging on digital innovation, claims survey
A new survey by Willis Towers Watson claims that insurers are falling behind in digital innovation, with almost 50 percent of insurers expecting to acquire new technologies through M&A in next three years.
Having lagged behind their financial services peers in adopting digital technologies due to regulations, reluctance and cost, the survey, by Willis Towers Watson and Mergermarket, found that an increasing number of insurers now regard investment in digitalisation a priority.
Findings from the survey show that almost three-quarters of insurers (74 percent) believe the insurance sector has failed to show leadership in digital innovation. Cost is a major challenge with respondents blaming the length of time required to commercialise new technologies (32 percent) and the size of investment required to transform (24 percent).
Fergal O’Shea, EMEA Life Insurance M&A Leader at Willis Towers Watson, said: “Banks have had more contact with customers, which has given them a head start. The quality and frequency of the information exchange between insurers and customers, who may simply be renewing a policy once a year, just isn’t the same.
“However, insurers recognise the importance of building a sustainable digital infrastructure to improve customer engagement and as an essential distribution channel, which is likely to be addressed through internally-driven innovation, joint ventures and M&A activity. For those that hesitate, there remains the commercial risk that they will get left behind and fail to capture future generations and younger policyholders who are more likely to engage via digital distribution.”
Almost half the respondents to this survey (49 percent) now expect to make an acquisition over the next three years directly driven by the desire to acquire digital technologies, including 14 percent that intend to make more than one acquisition.
The survey reveals nearly all respondents (94 percent) expect distribution to be the area where digital technologies have the greatest impact over the next five years. Insurers also see claims processing and loss adjustment, and customer management as strategic priorities.
“Distribution is a recurring theme for insurers surveying the digital landscape, as it offers opportunities to find new ways to market - and to build closer, more engaged relationships with the consumers of their products and services,” said Andy Staudt, EMEA P&C Insurance Leader at Willis Towers Watson.
Web and mobile delivery channels are the stand-out technologies over the next two years according to insurers taking part in the survey (77 percent), with big data, automation, robo-advice and sensors also singled out as key areas over the next five years.
Did you enjoy reading this story? Sign up to our free daily newsletters and get stories like this sent straight to your inbox.
