Developments in the insurance industry for 2023 / 4
DIGITAL TRANSFORMATION to deliver a better customer experience , reduce costs and be more agile . In fact , the ongoing challenges of rising inflation , interest rate increases , and skills shortages have put pressure on insurers to accelerate digital transformation .
A fall in investment leaving insurance companies short-funded ? Developing new systems , however , takes resources . Not only that , but the culture within some incumbents has made the digital transformation journey take longer than it should . Both these elements , coupled with a global economic downturn , have had an impact on the speed of progress .
Jason Whyte , an insurance expert at PA Consulting , believes the current economic climate is having an impact on the maturation of the insurtech industry , as well as the transformation of incumbent companies .
We asked him if the recent drop in investment slowed down the digital transformation for insurance companies , to which he said : “ The last 12 months have seen a number of economic pressures , some of which , such as soaring inflation and rising interest rates , the industry has not had to deal with for a very long time . The temptation would normally be to defer major change , but there are too many other pressures to stand still . Suppliers are withdrawing support for old technology , regulators have ever-increasing expectations of operational resilience , and other players in the market are innovating .
“ Instead , we expect to see successful insurers take a more hard-nosed approach , streamlining their transformations to focus on getting the fundamentals right while building the flexibility and capability – especially in data – to be able to respond to emerging trends and requirements .”
Developments in the insurance industry for 2023 / 4
More intuitive end-to-end customer journeys , making much better use of external data providers
Streamlining of the underlying systems and back-office processes , running hand-in-hand with migration to cloud
Some initial moves towards Open Finance : greater connectivity , moves towards interoperable digital IDs , innovation in financial ecosystems serving multiple needs .
Forrester data shows that most insurance tech executives plan to increase IT spending in 2023 , though by a smaller-than-expected amount . This increased investment , however , won ’ t be homogenous across all tech categories .
With the pressure on profit margins and increased costs , technologies that are able to show immediate ROI in terms of cost reductions or revenue increases will be the most likely candidates for investment .
Insurers will be laser-focused on technologies that will support their business model in 2023 , which means we should see massive improvements in customer data , new product innovation , automation , and the adoption of lowcode and no-code platforms .
Insurance providers will interact with their customers by offering personalised products and services , personalised content , seamless customer journeys , and more timely response to their queries and issues . insurtechdigital . com 51