The tech race: how prepared are insurers for the future?
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What does the modern insurance customer want? And how prepared is your business?
Smartphones have reshaped our expectations of almost every interaction we have. People now expect to order food in a few clicks, pay for parking via an app, and manage their health and finances online.
Every industry is either being shaken up or sized up as next in line for disruption. Social-media sites, networking and streaming have changed our media consumption, Amazon has become the world’s biggest brand by revolutionizing the way we shop and how quickly we expect our goods to arrive, while challenger banks offer cheaper, faster, customer-oriented financial products in just a few clicks.
And this is just the beginning, with start-ups and new players offering more and better tech-oriented, customer-centric products every day.
What does that mean for insurance? While many believe it is ripe for disruption, others say large and complicated business models and a strict regulatory environment will be difficult barriers to scale.
As we enter the new decade, the industry is at a crossroads, choosing how and at what pace to embrace digital technology or wondering whether to partner with small start-up firms that have the tech know-how. It is asking itself questions about the scale at which it needs to invest in data-driven technologies and innovation.
This is just one of the forces reshaping the industry. Huge volumes of data and the use of advanced analytics is another, with the abundance of information and the race to harness it also set to change pricing and value chains. Meanwhile risks from natural disasters are rising and new threats are emerging, including insuring against cyber-attacks and working out how to finance the healthcare of aging populations.
Where all this leaves the traditional insurance business model and how best to embrace data and digital technology are considered in the upcoming Swiss Re Institute’s Sigma report, an in-depth look at the battle of customer touchpoints, the digital insurer, and the impact of digitalisation on the insurance value chain and business model.
While the path forward from 2020 is unlikely to be smooth, with new disrupters emerging and established players pivoting their focus, this Sigma report defines the key themes for the coming years.
Is asks what the most important elements to get right are, and what this means, not only for the future business model, but also for company strategy, culture and governance.