2020's top digital insurance trends
Insurers are poised to shift their focus from the adoption of digital technologies to the mastery of execution.
The insurance industry has entered a truly transformational phase. Fueled by advances in IT and big data, providers and customers have been empowered to redefine the nature and boundaries of the industry.
In 2020, insurers are poised to shift their focus from the adoption of digital technologies to the mastery of execution. There is a proliferation of emerging technologies — including artificial intelligence and machine learning (AI/ML), blockchain, and the Internet of Things (IoT) — and an increased emphasis on strategic partnerships, expanded offerings and customer experiences.
To seize tomorrow’s opportunities today, insurers need to be aware of the digital technology trends that will define the industry in 2020 and beyond.
Emerging tech drives new business models
While insurance providers have been adopting digital technologies such as AI/ML, blockchain and IoT for years, the future will be defined by how enterprises can combine these technologies to go beyond improving efficiencies. The convergence of emerging technologies and IT will enable insurers to offer customers unique experiences while better assessing and more efficiently managing risk.
This approach — focused on mixing and matching technologies based on their individual capabilities — will see insurers develop new tools and strategies to transform the industry more effectively than in previous years.
Additionally, the increasing wealth of data that insurers will have access to in the year ahead and beyond will enable them to better derive insights to bring new products to market more efficiently and seamlessly to further expand their capabilities. Through emerging technologies fueled by improved data and analytics, insurers will be empowered to source insights from new environments, develop new strategic business models and move into new markets.
Expanding, simplifying and automating
Insurance companies aiming to secure a fruitful future should focus on four priorities in 2020:
- Engage customers more thoughtfully. Using data to identify new and unique insights, insurers can discover interesting and accurate predictors of risk. This will enable insurers to provide policyholders with more seamless and personalized experiences.
- Embrace simplification and automation. Insurers can optimize the entire value chain by leveraging AI-backed insights to optimize automation to streamline various processes, including those that focus on customer service. This simplification will translate to a more pleasant and productive experience for customers — a key competitive advantage insurance companies should aim to establish as soon as possible.
- Expand services beyond indemnification. To provide better value to policyholders, insurance companies must find new ways to strategically expand beyond service offerings focusing solely on indemnification. For example, insurers can offer capabilities focusing on risk advice and mitigation to provide policyholders with a more holistic, valuable experience that further builds trust.
- Broaden capabilities through partnerships. To better serve customers, insurers must consider strategic partnerships with the goal of expanding potential offerings and capabilities. Potential partners include InsurTechs, other insurance providers, brokers, reinsurers, and even service providers not operating in the insurance industry.
InsurTech partnerships accelerate innovation
It isn’t just the insurance industry that’s changing; customers are changing, too.
Thus, insurance companies should emphasize strategically evaluating emerging digital technologies to develop new business models, enter new markets and deliver greater value to customers.
Considering this, insurers should give serious thought to strategically partnering with InsurTechs in order to provide more comprehensive, differentiated products and services to their customers. With an increased emphasis being placed on personalized and dynamic products and services, insurance companies that aren’t considering these strategic partnerships could miss out on major opportunities to secure competitive advantages in the form of disruptive solutions that provide real business value.
The insurance companies that will thrive in 2020 and beyond are the ones that prioritize innovation — leveraging digital technologies to augment various aspects of the business will be pivotal in the years ahead. Insurers that are willing to work with specialists to develop the tools that’ll expand their capabilities while bolstering ROI will be in a position to succeed.
Shifting from transformation to mastery
This year is the start of a sea change that will see the insurance industry shift from digital transformation to mastery of execution. This era will focus on effectively leveraging data to glean strategic insights, enabling organizations to better harness digital technologies to positively impact business outcomes directly. The insurance companies that will seize tomorrow’s opportunities are the ones that have moved beyond digital transformation to prioritizing execution.
Phil Ratcliff (pratcliff@csc.com) is vice president and general manager, global insurance at DXC Technology. He is responsible for defining and implementing insurance go-to-market strategies and plans, managing the global industry P&L, and leading the development and commercialization of DXC’s portfolio of insurance offerings.
These opinions are the author’s own.
Related: