Since COVID-19, the insurance space has adopted digital transformation to apply technology and innovation at scale to their core business and processes. The strict regulation could explain the level of the initiative of change in place and the stability of the overall ecosystem in the past decades. In addition, up until the global pandemic, high interest rates have been the norm across the global financial markets, allowing players within the insurance industry to yield high returns from financial investments, easing the pressure on the operational performance of the business.
Insurers are looking for a way to grow their digital business as consumer behaviour is switching online and there is increasing competition to enhance digital capabilities. The pandemic has helped insurers to accelerate the process of digital adoption, so for a continually evolving and fast-changing business environment combined with entire countries on lockdown, it begs the question of whether 'digital transformation' is avoidable. Our users have told us that to remain competitive, insurers must adopt technology to their core business.
According to CB Insights, the 'Big Four' technology companies of Amazon, Apple, Google, and Facebook, making up $4tn worth, is targeting the overall $6 trillion insurance industry, including life and property insurance.* In addition, Tesla could amake a move in launching a major car insurance company. Digital transformation needs to be be seen as more than a trend, but a fundamental in the current circumstances.
In a study published in CapGemini's World Insurance Report 2020, the demand for usage-based insurance went up from 35% in 2019 to 51%.However, with the traditional method of product building, insurers are inevitably fallen short of meeting the apparent demand of the emergence of usage-based insurance options.
Further to recent study published in CapGemini's World Insurance Report 2021, finds that "insurers need to rethink their distribution models to offer uninterrupted service, insurers needs to empower their distribution network with emerging technologies. ".
To cater for these higher customer standards, technology may enable insurers to launch products at scale and to release products that reflect changing customer needs. Insurers also need to think how their systems can adapt to evolving market, in arming their distribution network capabilities.
Digital transformation can be seen as an eventual and indispensable must in the insurance industry. In order to satisfy customer expectations, insurers must be able to increase their products offerings with the flexibility and agility to match customer demand.
Wesurance can help insurers harness the potential in fast-tracking the adoption of technology in a matter of weeks, leveraging the 'out-of-the-box solutions' for insurers to capitalise on their extensive network of channels and partners.