As technology has forced insurers to reimagine the promotion of their products, there also has been a massive transformation in the structure their business, forcing carriers to throw out legacy practices that date back decades.
"The first wave of core transformation for the last five years was about modernizing the system," Imran Ilyas, PwC partner in Insurance Advisory Services, told PC360. "Carriers and executives are smart now and are looking to leap frog ahead of the completion as a result of core system transformation."
And this is going to be game-changing for the P&C industry, according to PwC.
Coming off a year in which all the talk was about the need for insurers to rebrand themselves, the next five years look to be when companies will focus on revamping their core businesses, but there's a slight twist.
"Carriers continue to invest heavily on core transformation, but as they're doing core transformation they're also looking to extend their core platform to develop the foundation for digital transformation and analytics," says Ilyas.
The need to stay technologically abreast with the competition has been driven by the increased demand for self-service by consumers who prefer to purchase directly from carriers via their mobile devices, according to a paper published by the insight and developments company EY. And self-service will become even more crucial for insurers as the number of mobile devices being used is expected to reach over 50 billion by 2020, according to a PwC report released in 2012.
But Ilyas says that insurers just need to augment services for mobile users who prefer to educate themselves on products before they buy them, and not steer them away from brokers and agents.
"Think of it as buying a car," Ilyas says. "They're a bit more educated on what they're trying to buy. You're still buying from the dealer, but you're more educated on the car."
And the increased tech usage of millenials is something that a number of insurers are just now starting to use to their benefit.
"The generational pressure is pushing carriers to be consumer and mobile focused to buy their product," Ilyas says.
He adds that a number of industries are rushing into tech to keep up with market demands, even though historically the insurance sector has always been a few years behind with digital trends.
"It's out there, my take is that it's going slow in the P&C industry," says Ilyas. "That's the goal for 2015 and 2016, to take the industry to adopt the (digital & analytics) rush."
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