By Cindy Nicholson, Associate Director, Industry, Optus Business
Every organisation is evolving its products and services to meet changes in their industries. Now more than ever we are seeing a wave of growth in technology and the change in expectations that this drives. We anticipate mobility and cloud are considered first in most technology conversations and investment in these areas will be the strongest in the next 12-18 months. Consumers are expecting everything in real time and will simply move on if their needs are not satisfied.
This rapid change in consumer expectations is impacting the consumption of insurance products as well as the way agents, brokers, policyholders and other industry professionals interact with their customers. Consumers expect digital engagement including claims processing. Insurers need to embrace technology to enable a better understanding of their customers and offer customised products.
The Optus Future of Business Report 2015 showed that ‘high change ready’ businesses are always looking outwards, and see technology as a strong positive impact. There can be a tendency to focus on what peers are doing and ignore developments outside the industry orbit, but insurance companies need to be thinking and acting at the same rate as technology and customer expectations are evolving. High change ready organisations also focus on transformation and growth using internal knowledge for a better customer experience.
There are new players entering the traditional insurance services space. Technology is empowering the ability for companies outside of financial institutions, such as Coles, for example, to offer financial services & insurance products. The use of loyalty cards provides deep insights to customer behaviours and preferences which provides competitive advantages in the market.
We anticipate that the role of technology between now and 2020 will grow rapidly. Automation and digitisation will become ever-more important to achieve efficiency. There is no doubt that customers want simple and efficient ways to interact over the channel of their choice. Expertise in data analytics, intelligent pricing, telematics and fraud prevention will increase in demand. Such expertise may be gained through mergers & acquisitions or by enhancing these skills internally, and will place insurance companies in a better position to expand globally and merge with other global players.
Consumers compare products and will happily change insurance providers on a regular basis. Excellence in customer experience and convenience is expected these days.
In a survey by PWC:
Competitive benefits include being able to move away from simply competing on price and creating insurance solutions that meet specific customer requirements and better risk management controls.
Product-centric silo approaches that have emerged over time create challenges when trying to enable a customer centric architecture to enable the cross sell of products in a ‘solution/package’ as this may require accessing data on policy holders and applicants which is not pooled. However, technology can also enable access to the core data sources to enable efficiencies without the need to re-design the technology infrastructure.
The growth of internet connected devices and sensors are projected to reach 50bn by 2020. In the same survey by PWC, 67% of consumers surveyed said they would be willing to have a sensor attached to their car or home if it could result in a reduction in premiums. This will enable insurers to use the combination of both structured and unstructured data to proactively predict a customer’s need potentially before the customer even realises. Changes such as these will drive Business Model Transformations.
Innovation is necessary to ensure the longevity of insurance companies and requires a culture that can be agile and accept failures. This cultural transformation needs to start from both the top management layer down and the bottom technology infrastructure up.
Optus Future of Business 2015: Road to Growth explores the importance of organisations getting ready for digital disruption, exploring which areas of the business add the greatest weight to successful transformation. Find out how ready your organisation is for disruption by taking the Change-Readiness assessment.