80% of insurers agree innovation is needed to boost customer satisfaction

Insurers believe technologies and innovations provide significant opportunities to the industry in terms of managing compliance and risk, and improving efficiency and service, according to a study by financial services technology provider FIS.

Reviewing 500 companies across 80 countries, the survey found that nearly 80 percent of insurers agree that their businesses need to innovate in response to key business challenges.

This need to innovate is mainly to boost customer satisfaction and increase competitive advantage.

Some 99.6 percent of survey respondents said they face obstacles in delivering innovation, however.

Nearly three quarters of respondents said complexity of legacy IT systems prevented innovation, more than half of firms cited inadequated planning and financial or resourcing constraints and 45 percent cited ineffective organisations structure as obstacles in this goal.

The risks of slowed growth and lower returns were cited by insurers as among the key reason to innovate, saying that the failure to innovate may be interpreted as not caring about customers’ interests.

Survey respondents therefore expect over the next three years to see significant increases in technology investment in the area of customer experience.

“In fact, respondents said they are most interested in consumer technology trends, such as mobile and wearable technologies, as opposed to business-focused advancements, like blockchain, trading technology or even cybersecurity,” FIS said.

Marianne Brown, chief operating officer, institutional and wholesale, FIS, said: “Harnessing the power of digital technology will benefit insurers of any size.

“From overcoming legacy systems and cultural divisions to creating the secure framework that makes storing and analysing big data possible, technology does more than simply allow insurers to keep up with the times.

“It also streamlines services by improving collaboration amongst the various teams within a company. Even better, it allows them to deepen relationships with customers through easier customer access as well as better understanding each customer’s individual needs.”

Going forward, FIS suggested more insurers will consider cloud as a way to more cost-effectively host and access the data they possess.

Fewer than 30 percent of respondents have already undertaken cloud projects, however more than 30 percent are discussing or actively planning to adopt these projects.