Unprecedented challenges and opportunities

Insurers, and the executives that lead them, face unprecedented challenges and opportunities as the work ahead generates a scenario in which “digital” is no longer simply a new channel to sell old stuff but is the very business itself.

This is according to a report, ‘The Work Ahead: Seven Key Trends Shaping the Future of Work In the Insurance Industry’ by Ben Pring and Michael Clifton.

Insurance industry respondents, whose views and opinions are presented in this report, convey a strong awareness of the need to think and act differently – that the norms and standard operating procedures of the past are increasingly unfit for purpose in a future of ever higher expectations for speed, transparency and ease of use.

According to the report, in a time when instant gratification literally cannot come fast enough, many insurers are teetering on technological, business process and skill set foundations that are being stressed beyond their ability to cope, let alone offer a competitive advantage. Inherently risk averse and resistant to change, insurers now find themselves facing unprecedented levels of change – in their customer base, their employee ranks, the competition and the available technological tools.

Key findings of the research

The top research findings, according to the report, can be categorized in the following seven themes: 

1. The impact of digitization on the work of insurance will be profound. The insurance industry of 2025 will be quite unlike the insurance industry of 2017.
2. The economic benefits of digitization will be extremely positive. In a three-year time span, the projected impact of digital transformation on insurers will be $1.63 trillion.
3. Jobs will change significantly. Working with AI and automation based technology will change what humans do in the insurance workforce.
4. The skills needed to succeed in a job will change materially as well. What got you “here” won’t get you “there.”
5. At the heart of all this change will be a new generation of technologies that you and your company need to master. The insurance industry is increasingly a technology mediated one, and the technologies driving this are changing faster than ever.
6. There are many obstacles on the path to digital transformation, but they are surmountable. Despite the many challenges ahead in leveraging the upside of new technology, there is no going back to a pre-technology-based industry.
7. The “dark side” of digital is real, but the genie is not going back into the bottle. The digital world is our new reality and, though not perfect, can’t be wished away. Trying to reverse time or course is not a winning business model.

Interesting to note, two-thirds of insurers (61%), in the report, believe that digitally driven transformation is the key to their organization’s commercial future.

In this disruptive environment

FAnews spoke to Ashley Singh, Old Mutual Insure’s Head of Solution Delivery and Danny Joffe, Senior Legal Advisor at Hollard Insure, about what the future look like for insurers in this disruptive environment. 

“In this disruptive environment insurers will have to adapt to survive specifically in the personal lines space. We have already seen the strong influence of information technology and artificial intelligence in quick underwriting decisions as well as being able to settle certain claims. Clients, more and more, want a solution where they can receive a quote and insurance policy on the phone after hours in quick time. There are insurers and systems breaking into this space already but within five years, it will more than likely be an entry to the game in selling personal lines policies. Already, most insurers have apps that allow their clients to correspond with them, in different ways to different extents. Artificial Intelligence and its access to data is allowing scientific underwriting to get quicker and more accurate as time goes by. Claims are being settled quicker with electronic solutions,” says Joffe. 

“The future will be categorised by understanding and servicing the customer better and faster. In a heavily intermediated environment this requires us to make it easier for brokers to do business with us and for us to enable them to service their customers,” says Singh. 

“The ability to tap into third party environments for pre-population of data in real time will unlock new capabilities including customers receiving quotes and claims settlements in seconds. Underwriting will become much more efficient through artificial intelligence and “big data” analysis,” continues Singh. 

The winning formula

“A winning formula starts now with a completely revamped operating model, business and IT merging and forming teams that deliver and innovate at pace. The fear of failure must be dispelled, and we must take the learnings and move forward. Repetitive manual tasks must be robotised allowing employees to focus on innovation and growing the business,” states Singh. 

“The winning formula in the disruptive environment is to be able to play in both spaces, being the application or electronic space. Clients, both young and old, need an electronic service 24 hours a day. They are both important segments that need to be looked after, now,” concludes Joffe. 

Writer’s Thoughts:
As mentioned above, the norms and standard operating procedures of the past are increasingly unfit for purpose in a future of ever higher expectations for speed, transparency and ease of use. Insurers will have to adapt to survive. Do you agree? If you have any questions please comment below, interact with us on Twitter at @fanews_online or email me - myra@fanews.co.za