"Half of insurance CEOs believe that global economic growth will improve over the next 12 months, up from only 19% in 2017
Insurance CEOs 3 biggest concerns are over-regulation (95%), cyber threats (93%) and speed of technological change (85%)"
The Financial 14 March 2018
This year 100 insurance CEOs participated in PwC’s 21st Global CEO Survey. Does this show undue optimism that they can exploit global growth? Earlier studies from McKinsey suggest that is the case. There will only be room for four, maybe five, insurers to reap the profit dividend of digital transformation and the rest will have to share a very think gruel of low profitability. In other words if they all increase revenues then most will suffer worse profitability.
Why is that?
It means taking the bull by the horns and digitally transforming the whole show - all perils, all products and the complete value chain rather than just adding a new product or mobile app.
- from customer engagement
- through distribution and supply chain
- to developing new products for the new future
Keeping ahead of technological change whilst constrained by legacy systems is a legitimate major concern. Most digital platforms take a long time, a large budget and an army of developers & consultants to reconfigure to an insurers market and customers. By then it will be too late.
If you start today, March 19th 2018, you must be able to
- Deploy a production ready digitally transformed claims platform within six to ten weeks over at least two or three perils
- Use the first three months to iterate, constantly improve and measure the ROI and metrics like customer satisfaction, fraud reduction, lead-times
- Implement the cultural, organisational and change management transformation to deploy across the whole business by end of the year
- That lets you change the legacy core systems at your leisure to suit budgetary and operational priorities
- On a pay-as-you-go licensing model without large upfront costs
If you are struggling to find such an option you best starthere
66% of insurance CEOs still report increasing pressure on their organisation to deliver business results under shorter timelines and more insurance CEOs see changes in consumer behaviour as a threat to growth (78%) than almost any other sector. So while perhaps having overestimated the impact of outside threats and short-term disruption, insurers shouldn’t be underestimating the need for longer-term transformational change into digitally-enabled, customer-focused organisations with flexible business and operating models.
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