Accenture surveyed 141 C-level executives who have been charged with driving their companies' digital agendas. One of the key findings is that there is a clear divide between insurers who view digital technology as a way to improve the efficiency of existing processes - Digital Followers - and those who view it as a means to create new value - the Digital Transformers.
The results clearly show that digital transformation is high on the agenda and that insurers are expecting to realize significant benefits from it.
Watch this video introduction by John Cusano, Accenture’s Senior Managing Director of Global Insurance
Insurers believe digital is changing the industry
The survey data shows that the overwhelming majority of insurers believe that digital technologies are changing the fundamentals of the industry.
Expect a major transformation of the insurance value chain within the next 5 years
Feel that digitalization is changing customer expectations (84%) and that new technologies will radically change traditional practices (80%)
Agree that digital technologies will transform the way they interact with their customers (83%) and use their channels (72%)
Think existing insurers will lose some margin as a result of digital technologies
Believe they will be challenged by online service providers such as Google or Amazon (59%) and aggregators (57%) in the distribution space
Initiatives aimed at digital transformation are expected to produce growth
Many insurers believe there is a strong link between digital initiatives and growth
|Respondents expect their company's digital initiatives to spur revenue growth of 5% (P&C) to 7% (Life) over the next 3 years
One-third of respondents expect usage-based auto insurance to account for >6% of premium income in 3 years' time
Innovation is seen as a key driver of market-share growth. Existing players that innovate expect faster growth than even new entrants: 31% of insurers expect innovation to increase market share by up to 10 percentage points
29% of respondents expect premium growth to come from expanding their customer base using digital channels
Digital Transformers have a more ambitious strategy than Digital Followers
While most insurers are investing in digital technologies to enhance discrete functions, processes and products, with the primary aim of improving efficiency, Digital Transformers' strategies span the value chain and seek entirely new ways of generating value for customers - and growth for themselves.
Digital Transformers who have formed new distribution partnerships
Digital Transformers who have a digital strategy in place covering the entire value chain
Digital Transformers who have acquired a start-up or innovative player
Digital Transformers are moving to the front
Digital Transformers are aiming to reap significant benefits - in the P&C sector they expect to achieve double the growth rate as a result of their investment in digital and double the improvement in their combined ratio.
Digital Transformers will invest slightly more in digital initiatives over the next 3 years than other insurers:
The need to balance digital transformation for conflicting goals
The majority of insurers remain uncertain about how to adopt digital technologies, and become Digital Transformers, especially as they have to balance the imperatives of short-term profitability and long-term investment in sustainability.
Accenture believes insurers should take account of the following key points when creating an integrated transformation plan:
Build capabilities now to collect data and turn it into actionable insights.
Develop new partnerships.
Create an outcomes-based digital business strategy.
Adopt a solution-based approach to embed themselves in customers' lives.
Aim for the sweet spot where customer value and business value intersect.
Accenture recognizes that there is no one-size-fits-all approach. For more information about how digital transformation can help your company increase growth and generate efficiencies, please register to download the full report.