April 3, 2018
The insurance sector belongs to mature and highly competitive industries. The vast array of market players operates inside a low-growth environment, and there is a great risk of a race to the bottom on rates. Moreover, this risk is attributable to the changes of distribution models and new technologies. Still, the cost base remains too high with numerous manual processes demanding multiple handling.
The business models that have served the insurance industry for years require a complete overhaul these days. Insurers are perfectly aware of the positive correlation between innovation and competitiveness:
Digital Differentiation: With the help of digital platforms insurers can focus on digital layer customization. Customer portals help to keep the customer at the core of the business.
Data & Analytics: The major challenge is to be able to convert big data into insights, as data amount has grown.
Innovation: 1-5% of IT budgets are dedicated to R&D. There should be a bilateral approach to innovation: leveraging internal innovation and strategic partnerships with InsurTech.