Results from PwC’s 19th Annual Global Survey of more than 1,400 CEOs, which includes responses from 101 CEOs in the insurance sector in 43 countries, reveal more than 70% of insurance CEOs are making significant changes to the way they use technology to assess and meet customer expectations. 79% cite data and analytics and 76% cite relationship management systems as providing the greatest potential contribution to improving engagement with customers.
According to PwC, a new generation of analytics is enabling insurers to anticipate what will happen (predictive analytics) and also to shape outcomes such as reduced accident rates or improved health and well-being (prescriptive analytics). This more proactive and preventative approach marks a change in purpose for insurers, which will deliver considerable social as well as financial value.
However, technology is also creating new benchmarks for customer experience, response and cost and making it easier for customers to judge and compare insurers against their competitors. For insurance firms, the ability to meet these challenges is often hampered by slow and unwieldy legacy systems and traditional ways of working.
In fact, nearly 70% of insurance CEOs see the speed of technological change as a threat to growth and more than 60% are concerned about shifts in consumer spending and behaviour.
Many of these new competitive benchmarks are being set by FinTech entrants, which are constantly probing for gaps and weak points in the marketplace, applying digital insights to sharpen customer understanding, and utilizing cost-efficient digital distribution to undercut incumbent competitors.
Even bigger changes lie ahead as technology creates new sources of collaboration and revenue. For example, data from car and equipment sensors can be shared with manufacturers and repairers and thereby pave the way for new joint ventures in design and maintenance. According to PwC, possible revenue models could increasingly gravitate from premiums to premiums plus subscriptions. Some insurers may reinvent themselves altogether – from protecting against risk to managing and monetising information, for example.