The information technology revolution has come to the insurance industry in full force. Insurance has always been a competitive marketplace, but digital solutions are now an essential part of achieving long-term success and growth.
The challenges in the competitive insurance industry
The development of cloud-based technologies offers a new set of challenges for insurance companies that want to stay competitive.
Digital customer engagement is the new frontier as customers increasingly turn to digital channels to learn, and, ultimately, purchase from insurers. Savvy customers have come to expect excellent customer service, better value, and value-add services, which can differentiate one insurance provider from another.
From an actuarial perspective, the challenges of risk assessment and financial asset management are derived primarily from advanced underwriting processes – thanks to the vast amount of customer data now available.
The opportunities in the increasingly digitized insurance industry
While the challenges are there, cloud-based solutions also offer a broad range of opportunities for those that are willing to take action and seize them. The key is knowing where to look.
Creating an insurance company with a platform based in the cloud allows for dramatically improved efficiency. Your insurance company can deploy resources without needing to build the infrastructure yourself. Because of this, you can reduce the amount of time it takes to enter a new market – sometimes by as much as 30%
Take Ageas, for example. This insurer with nearly two centuries of insurance experience is an excellent example of how the insurance industry can leverage the digital economy. Ageas was the first to adopt an end-to-end enterprise insurance software platform, which enabled the company to grow into several new markets around the world.
Although the implementation was first estimated to take nine months, the company’s new platform was up and running in just six months. At the same time, Aegas reduced their startup costs and estimate between 20% and 40% fewer expenses over the first five years of using the platform years. By integrating all aspects of the business model into an integrated cloud solution, Ageas enjoys access to better information, more effective underwriting and risk assessment, and quick and efficient claims handling.
Cloud is the core of the insurance strategy
A recent study by Ovum indicates that the cloud has become much more than a way to reduce overhead. Now, it is one of the core IT initiatives of the entire insurance industry. The study of 400 senior CIOs in the financial services industry revealed that a staggering 67% believe that Software as a Service (SaaS) will completely transform the insurance industry in five years or less – with 20% of the entire sample falling into the “two years or less” category.
Cloud-based innovation is also expected to create opportunities for industry startups. This will allow them to be far more competitive than major industry players as cloud-based SaaS platforms become more affordable and accessible to small businesses. However, this also means that large companies looking to expand into new markets can scale into emerging markets far faster and with significantly less risk.
Cloud-based companies are the future, and that is being proven in emerging insurance markets throughout the Asia-Pacific region. Expect this trend to continue, and leverage it for your own business sooner rather than later. Ultimately, insurers that are able to leverage cloud systems and infrastructures will have greater opportunities – both in new markets and existing ones.
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