Investment in technology “crucial” for insurers to remain competitive
Major investment in technology should be the top priority for insurance providers when it comes to improving profitability, according to research by Interim Partners.
New research from the firm found that a third (33 percent) of senior insurance executives surveyed said that spending more on technology would boost profitability, followed by 21 percent who thought investing in new staff and developing new products should be insurance providers’ top priority to improve profitability.
This compared with just 6 percent who thought that increasing margins by raising average premiums would help boost profitability.
Investment in technology and digital innovation is now crucial if insurers wish to remain competitive, according to Interim Partners.
Ben Johnson, principal, insurance, asset and wealth at Interim Partners, said: “Firms failing to harness the power of new technologies, including big data analytics and social media profiling, could now be putting themselves at a real disadvantage.
“Investment in technology increases efficiency and allows for the analysis of a much wider range of information when it comes to product pricing and strategy. Many senior managers now rate it much more highly in terms of impact than traditional routes taken to boost profitability, such as a quick hike in premiums.”
Johnson said firms who are harnessing technology are doing so by building digital and tech-focused teams in-house, as well as sourcing expertise externally by partnering with digital agencies and cloud platform leader.
He also said that digitalisation allows for more targeted marketing and means that services can be “better tailored” to an individual customer’s needs to benefit both insurers and customers.
Senior executives also emphasised the potential impact of big data analytics when it comes to the underwriting process, according to the research. They indicated the biggest improvement will most likely be seen in auto-insurance (62 percent), followed by health (24 percent), life (10 percent) and home (3 percent).
