Another industry observer focussing on the need for insurers to act now rather than just experiment in digital transformation.
There is evidence that the 4/5 early adopters will capture around half of all industry profits meaning that the laggards will have to share the other half for miserly margins.
In one case an auto insurer captured 70% of industry profitability.
The point is- digitilisation of the whole P&C value chain is now a mature technology. This is not a "Crossing the Chasm" moment- the early adopters have done that, established bridgeheads and are moving out to other product lines and geographies.
Just look at innovative but mature digital platforms that are scalable, secure, cloud and digitally transform the value chain from FNOL to Reimbursement.
You always have the longer established platforms like Guidewire that are proven but complex and rooted in large ERP systems. There is a similar analogy between the agile BI & Analytics vendors like Tableau and Qlik compared to the legacy incumbents Business Objects, Cognos and so on. You can see how that market has moved the way of the agile solution providers.
Concluding Thoughts While keeping an eye on the technology developments of tomorrow, insurers need to consider the capabilities available today and the impact of delaying deployment of those capabilities. Our research paints a picture of a continuing digital divide between have and have-not insurers, as well as a data divide and a core capabilities divide. In a market where growth is hard to come by, insurers need to develop better digital capabilities to serve customers and streamline processes among all stakeholders, better data and analytics capabilities to model risk and customer behavior and better core capabilities to support more agile processes and a more agile product portfolio.