Insurance executives are acutely aware of the need to infuse their companies with analytics
Insurance executives are acutely aware of the need to infuse their companies with digital and analytics capabilities. Most have started figuring out what they need to do, but how to do so—that’s the challange.
As the industry is facing serious challenges carriers in mature markets have been hit hard by the low-interest-rate environment. Digital attackers (including aggregators) are reshaping the competitive landscape and altering the cost curve. Emerging risks, from cybersecurity to the increasing frequency and severity of natural catastrophes, also threaten to undercut established strategies.
To date, the industry’s efforts to cut operating costs and improve overall productivity have fallen far short of other industries.
That’s often because insurers look to one category of costs at a time, rather than adopting a holistic view. Ambitious structural changes, including investments in digital technologies and new business models that reduce complexities, more than justify the investment.
It’s not easy to navigate the complicated swirl of internal capabilities and external trends. When it comes to business and IT transformations, there are three roads to core-system modernization:
· updating the legacy platform,
· buying a standard software package,
· building a proprietary platform.
New research has identified an insurance industry “power curve,” with economic profit unevenly distributed among companies. Bold moves can dramatically improve an insurer’s odds of reaching the top quintile of economic profit over a ten-year period.
insurers need to ramp up digital and advanced-analytics capabilities. This is particularly true in the bancassurance channel.
As automation and digitization transform business strategy and the workplace, companies need to focus on talent.
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The Team of Seal Deal
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