Disrupt or Be Disrupted: Clearing the Path to Digital Transformation
Digital transformation in the insurance industry is real, led by InsurTech startups. They are demonstrating how the creative application of innovative technology can deliver the products, services, and overall experience customers want from every business they connect with. Likewise, Agents and employees want a modern way to access, share and work with information. Additionally, they want a complete view of their customers at any time.
Unfortunately, outdated and siloed legacy systems are unable to meet these demands. As a result, insurers must decide whether they want to take part in this disruption or be among the disrupted.
How can insurers accelerate their digital transformation? They should look at platforms that integrate, wrap and extend legacy systems. This should thus provide a bridge from their functionally limited present to their agile and responsive digitally transformed future.
Technology, Customer Expectations and New Competitors Drive Industry-Wide Transformation
Insurance executives believe in and want to be part of the digital transformation disrupting the industry.
New InsurTech companies are digital and integrated with core systems from the start. They combine big data, analytics, artificial intelligence, the cloud and the Internet of Things. In doing so, they gain insights in order to sharpen their focus on consumers. Additionally, they develop innovative products and deliver the convenient, simple and responsive user experience that today’s customers expect. That means immediate access to insurance services, any time. Consumer-centric tech-enabled offerings from these upstart competitors include pay-per-mile auto insurance (Metromile), crowd-sourced peer-to-peer insurance pools (Friendsurance), fast and low-cost renters and homeowners insurance (Lemonade), on-demand ride- and home-sharing coverage (Slice), life insurance targeting younger consumers (Ladder) and even by-the-flight drone coverage applied and paid for on-the-spot through the customer’s smart phone (Verifly).
No wonder nearly nine out of 10 insurance CEOs surveyed by PwC agreed technology will either completely reshare or have a significant impact on competition in the next five years. It’s already happening. One Forrester analyst described the consequences of the emerging transformation more dramatically: By 2020, every business will have become either a digital predator or digital prey.