A recent survey by SAP, a European multinational software corporation, to 200 insurance executives at the IASA Annual Conference held in June found the factors that are motivating insurance innovation strategies.
Some of the respondents state that they are adjusting products to suit millennials’ needs, developing new products following new technological advances, focusing on the customer experience, while also maintaining a priority to “inject agility and speed throughout their processes” by implementing new technology like cloud computing, the survey discovered.
“Cloud computing has matured and we’re seeing insurers shift from leveraging the cloud for just back-office functions to implementing cloud across the entire organization,” said Ross Orrett, global head of Insurance Industry Innovation and Development at SAP. “Insurers are becoming more adaptable and laser-focused on meeting changing customer needs,” he added.
Here, you will find four ways that the insurance industry is finally moving to the 21st century. (You can see the full report and press release here.)
1) Consumer expectations drive new product development
In a world where consumer-review driven websites are the norm and customer reviews are posted everywhere, it is no surprise that the industry is moving towards meeting consumer expectations, from products to services.
- 34 percent of respondents indicated that rising consumer expectations are their primary driver for new product development.
- 22 percent are driven by changing regulatory demands.
- 20 percent are driven by availability of new technologies.
2) Millennials’ top priority is convenience
How many of you watch TV while on your tablet (iPad), laptop or even desktop and search for products, reviews or services online, especially after work? That’s exactly what many millennials are doing, all from the convenience of their nearest couch. And the industry seems to have taken notice.
- 55 percent of respondents cited convenience as millennials’ top priority when seeking insurance products.
- 22 percent said low cost is what millennials look for.
- 16 percent look for relationships with their agent.
- Only 8 percent let brand recognition do the talking first.
3) Where are the customers?
The popularity of social media and the fact that many people have a super accessible Internet connection are just two of the many factors that attract millennials, a.k.a. “digital natives,” to the Web. So, where are your customers? Online.
- 52 percent of the polled said that their primary strategy to reach millennials is focused on investing in online, mobile and social technologies.
- 21 percent are customizing products to suit millennials’ unique needs.
- 12 percent are investing in data analytics to segment and target communications.
Cloud computing as a viable technology
Google Drive, Dropbox and even Netflix are considered cloud computing technologies, where you upload, store and retrieve any kind of information from any computer with an Internet connection. How does this translate to the insurance industry? By using Google Drive, you can collaborate in creating spreadsheets, PowerPoint-type presentations, white papers, documents, or anything that you might do on your computer, with the added benefit that anyone who has access to your Drive or if you share it, they can contribute, edit or view what you’re working on (even while you’re working on the document).
These kinds of technologies might help organizations cut back on sending many emails with documents for revision, strengthen team communication — for example, by sharing Google calendars — and make the process a bit more streamlined.
- 51 percent said that their organization has adopted cloud computing in some capacity: Half of these have implemented cloud-based systems for back-office functions and other have adopted it for mission-critical functions like policy administration (18 percent), product development (seven percent), claims processing (six percent) and risk management (six percent).
However, some of the barriers that we continue to see in this and many other industries to cloud computing adoption are:
- 34 percent said security concerns are a primary challenge
- 28 percent cite lack of internal buy-in (or adoption of the new processes)
- 13 percent noted budget and financial concerns
- 13 percent pointed to unstable tech infrastructure
- 12 percent said lack of time