The World Insurance Report 2016, compiled by Capgemini and Efma highlighted that connected technologies and the Internet of Things are disrupting how insurers connect with customers and underwite risk, as well as driving the transformation of the insurance industry.
Based on a survey with over 15,000 respondents, the report found that 34% of insurance customers are likely to adopt connected ecosystems (smart homes and buildings), 30% are likely to adopt embedded technologies (wearable or digestible devices) and 23% are likely to adopt the use of machine intelligence (drones, robots, cars). Globally, 47% of all customers have positive experiences with their insurer, but only 34% of Generation Y customers do. Generation Y (Gen Y) and affluent customers are more demanding in the way they connect with their insurers. For instance, 32% of Gen Y customers use social media for insurance purposes at least once a month and 27% of affluent customers use the social media platforms for their insurance needs. The report found that 47% of these affluent, tech-savvy customers may easily turn to non-traditional insurance firms to buy insurance.
Disruptive technologies mean risk is shifting, decreasing and becoming more transparent, requiring insurance companies to change how they fundamentally assess and manage risk.
The report outlines a path for the industry moving forward:
Strengthen in short-term (1-2 years)
1. Stremline processes
2. Build data and analytic capabilities
3. Look for strategic growth opportunities
Enhance in mid-term (3-5 years)
1. Improve the value proposition and services
2. Establish strategic alliances
3. Build insights-driven strategies through data analytics
Transform in long-term (5+ years)
1. Prepare for evolution in underwriting, new customer and product portfolios
2. Compete with new industry players
To download the full report, click here.