Insurance companies have accepted that they need to adopt digital technologies at a faster rate if they are to prosper in the post-COVID-19 world. Often seen as digital laggards in the finance sector, the insurance contingent has been slow to undertake major digital transformations.
There have been opportunities and insurers have watched how the banking sector is being transformed by FinTech and InsurTech industry has recently seen small tech firm develop software for the insurance sector and, in some cases, become insurers themselves.
But insurers have been slow to react and the pandemic disruption has laid this bare. According to research from Information Services Group (ISG), big insurance companies regret not having invested more in AI at an earlier stage.
ISG’s research reveals that almost all insurers understand this and that there is significant ground to make up. The survey conducted by ISG involving about 300 senior insurance executives, found that 86% expect customer behaviour to change because of COVID-19 and the disruption it has caused. A total of 90% said digital transformation will now be accelerated in the sector, and 95% agreed that customers want more digital products and services.
Also, 64% of the insurers responding to the survey expect the effects of COVID-19 on their business to last longer than a year.
According to the survey, 61.5% of insurance firms plan to invest in creating digital customer experiences, 51.3% will spend budget on cloud transformation and 46.2% will spend on data, machine learning and AI technologies.
Also, the insurers seem determined to achieve many of their technical goals through in-house work, with only 20% planning to invest in InsurTech offerings.
The ISG report said, “The majority of the experts surveyed currently assign a much higher priority to digital technologies, with an increased tendency towards in-house solutions. We predict that this shift in priorities will be temporary. There is no doubt from any of the respondents that InsurTechs will continue to play an essential role in solving the challenges of digitisation in the future.” A