Ey - Digital Survey Insurance

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The insurance industry has high digital ambitions but is failing to take action and embrace the digital world due to a lack of investment and strategy.

Even the easy “quick wins” in technology are being overlooked by players, according to Ernst & Young survey Insurance in a digital world: The time is now.

October 1, 2013

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Ey - Digital Survey Insurance

  1. 1. Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013
  2. 2. Overview Insurance in a digital world: the time is now Voice of the customer: time for insurers to rethink their relationships The journey toward greater customer centricity distribution channel Contents Executive summary 4 01 02 03 8 28 36 41 04 44 56 2 Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013
  3. 3. Introduction Insurance in a digital world: the time is now Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013 1
  4. 4. EY Global Insurance Digital Survey Research approach and methodology Scope Europe Middle East Target countries UK Spain France US Canada Mexico Chile Australia Hong Kong Thailand Singapore Malaysia Indonesia Japan South Korea India South Africa China Taiwan Vietnam Philippines Bangladesh Kenya Namibia Nigeria UAE Other countries Germany Ireland Italy Netherlands Poland Turkey 2 Argentina Brazil Colombia Uruguay EY Global Insurance Digital Survey 2013
  5. 5. 3
  6. 6. Executive summary 1 2 3 4 EY Global Insurance Digital Survey 2013
  7. 7. Executive summary 4 5 6 7 EY Global Insurance Digital Survey 2013 5
  8. 8. Executive summary 6 EY Global Insurance Digital Survey 2013
  9. 9. Section 01 of key themes EY Global Insurance Digital Survey 2013 7
  10. 10. 01 of key themes 79% say they are “not setting the baseline” for digital or are “still learning.” 1 8 Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013
  11. 11. Exhibit 1: Current and target future state levels of digital maturity Global current Global target future Global life target future Global non-life current Digital strategy and leadership Global life current Global non-life target future 1 2 3 4 5 1 2 3 4 5 Do you see your organization as a digital leader in your industry? Do you have a business case for digital and is your investment integrated into the financial planning of the company? Do you have a clear, well-executed implementation plan for your digital strategy? Do you have the right operating model in place to deliver and run digital capabilities? Has your digital strategy got support from senior management? Do they lead by example? Customer experience How does digital inform and support segmentation? How do you use digital channels to attract prospective customers? How do you manage and build brand loyalty through digital channels? How does digital support your Customer Value Management? (Including cross-sell, up-sell and retention efforts) How do you reduce your cost to serve using digital channels? All average scores on scale 1-5 Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013 9
  12. 12. 89% don’t consider past interactions when recommending products or services to online customers. 57% have operating models that do not facilitate digital. Most respondents say their digital Over 2 10 Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013
  13. 13. Exhibit 2: Current and planned future spend on digital development Expected increase in digital spend* Current spend on digital* 0%-10% 10%-20% 20%-30% 30%+ <5% 10%-25% 25%-50% 50%+ 38% 23% 8% 15% 9% 17% 36% 21% 16% 7% 8% 22% 39% 24% 28% 68% 5%-10% 18% 46% 0% 0% 27% 5% 29% 29% 9% 27% 5% Global 8% 17% 33% 37% Global 23% 8% 0% Over 1 year Global life 69% 28% 4% 0% Over 5 years Global non-life 79% 11% 10% Over 1 year 9% 7% 0% Asia-Pacific 52% Europe 0% Europe 84% Over 3 years 43% 5% 0% Over 3 years Over 5 years Asia-Pacific 2% 20%-30% 0% 30%+ 7% 0% 2% 55% 34% 9% 2% 26% 60% 12% 31% 19% 19% 10% 14% 31% 27% 10% 10% 10%-20% 10% 2% 19% 0%-10% 30% 55% 21% 61% 34% 0% Americas 11% 22% 36% 21% <5% 5%-10% 10%-25% 25%-50% 50%+ Over 1 year Over 3 years Over 5 years Americas Over 1 year Over 3 years Over 5 years *Excluding “Don’t knows” Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013 11
  14. 14. 68% believe they have delivered some easy quick wins but not made transformational progress. 67% 3 implement digital as part of business-asusual activity. 12 EY Global Insurance Digital Survey 2013
  15. 15. EY Global Insurance Digital Survey 2013 13
  16. 16. 68% of life companies say internal company structure or culture constraints is the key challenge they face in delivering their digital strategy. Exhibit 3: Top inhibitors of digital growth in insurance market Global Global life Global non-life Legacy technology constraints Slow pace of delivery by insurers 64% 66% 72% Intermediary/agent channel strength or resistance 40% 41% 45% Lack of a compelling business case 33% 34% 30% Regulatory restrictions/environment impeding digital growth 32% 29% 29% Perceived customer/data security issues 24% 24% 17% Insufficient consumer demand 14 80% 75% 88% 19% 23% 12% Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013
  17. 17. Exhibit 4: Key challenges faced by companies in delivering their digital strategy Shown in descending order for Global life sector Global life Global non-life Internal company structure or culture constraints 68% 64% Creating a culture of rapid innovation and development 63% 68% 63% 65% Integrating digital with other distribution channels 61% 50% Gaining internal management buy-in and investment 52% 47% 50% 45% 47% 43% 46% 44% 44% 34% 41% 42% 40% 29% 34% 25% 21% 23% Systems issues in implementation Lack of skills/difficult to find expertise Lack of resources (time and budget) Channel conflict Developing a clear technology strategy Building solutions with flexibility Designing new digital offerings effectively for customers Lack of methodology framework No business case for investment Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013 15
  18. 18. 4 It’s all about retention through Voice of the customer survey Exhibit 5: Drivers of companies’ digital strategy Global (life and non-life) 32% Enriching the customer experience Regaining more direct control of the customer relationship 20% Attracting prospective customers and increasing sales 14% Reducing cost to serve customers and intermediaries 9% 9% Increasing internal efficiencies 5% Managing and building brand Competitors are offering it and we want to keep up 3% 2% Increasing up-sell and cross-sell 5% Other 16 Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013
  19. 19. Retail chain stocks up on digital Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013 17
  20. 20. AirAsia’s owner takes off in insurance Only 46% of life companies believe that “customers will ultimately leave us” if they fail to embrace digital. 6 18 its 5 Distributors and agents are digital EY Global Insurance Digital Survey 2013
  21. 21. 19
  22. 22. Exhibit 6: Agents use of digital — increase in importance over next three years Global life Global non-life Shown in descending order for global life sector 4.09 Improve efficiency and quality of interactions with customers 2.68 2.64 Increase process efficiencies 2.33 2.39 Expose/offer self-service capability to customers 1.36 1.49 Reduce risk and improve controls 0.40 1.02 Collect, pay and reconcile commissions 0.81 0.98 Capture quantitative and qualitative customer information 0.53 0.78 Reporting and tracking — sales pipeline, policy setup, etc. 0.91 0.71 Using social media 0.65 0.52 Providing education/general advice to market, e.g., blog 0.27 0.24 Delivering or receiving training/knowledge 1.29 These are not % responses; they are weighted scores based on respondents’ ranking in order of importance. 20 Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013
  23. 23. Supporting agents’ digital strategies Discovery Life leverages wealth of consumer data 6 Analytics are critical to Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013 21
  24. 24. 7 Exhibit 7: Online vs. mobile digital functionality Online Mobile Provide information about our company/products Provide customer self-service facilities Provide quote Transact/purchase online Educate our customers about brand values Allow customers to submit complaints Facilitate online/virtual communication Enable customers to submit and process claims online Request and process settlement/payment online Contribute to product development and market research Enable customers to digitally record and document claims Provide financial advice 22 Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013 92% 47% 74% 40% 72% 43% 66% 35% 63% 30% 57% 21% 40% 17% 39% 23% 39% 26% 34% 15% 29% 27% 18% 9%
  25. 25. Only 43% Friendsurance making insurance social again of insurers provide mobile quotes compared to 72% who provide these online. Mobile shopping for timestrapped consumers Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013 23
  26. 26. 24 EY Global Insurance Digital Survey 2013
  27. 27. EY Global Insurance Digital Survey 2013 25
  28. 28. 26 EY Global Insurance Digital Survey 2013
  29. 29. How should insurers respond? Section 02 How should insurers respond? EY Global Insurance Digital Survey 2013 27
  30. 30. 02 How should insurers respond? Step 1: 28 EY Global Insurance Digital Survey 2013
  31. 31. How should insurers respond? EY Global Insurance Digital Survey 2013 29
  32. 32. How should insurers respond? Build analytics capabilities in step Exhibit 8: The digital “virtuous circle” — non-linear business case Digital offerings/ capabilities More customer insight (data) Increased productivity/ reduced cost to serve More relevant tailored offerings Data analysis and segmentation capability Digital distribution/ customer access Better experience = customers more willing to share data Increased sales Digital service tools/ better customer experience Increased customer retention Increased customer satisfaction Mobile Banking: Financial Services Meet the Electronic Wallet 30 Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013
  33. 33. How should insurers respond? organization focus on becoming an innovative company The writing is on the wall for Australian insurer Youi Step 2: Social media in insurance – how to interact better with your customers, Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013 31
  34. 34. How should insurers respond? Mutual innovation for NewCo customers and innovation 32 Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013
  35. 35. How should insurers respond? Exhibit 9: Creating a digital culture 01 Leadership alignment Alignment of leadership around a compelling story through the use of tools, methods and approaches that will form the DNA of the future ways of work and digital culture (using video, animates and social media) 02 Cultural alignment Defining the cultural shifts necessary for the business to achieve its purpose and creating interventions to achieve this alignment 03 Collaborative working Creating the physical, online and cognitive (methods, tools, approaches) environments to support the business and embed cultural change 01 02 03 04 05 04 Enablement Delivering the training, education and development opportunities necessary to shift the ways of working, as well as undertake development activity on specific topics pertaining to cultural change, through the use of the collaborative working environments (03) — thinking and learning by doing 05 Momentum Establishing the performance management systems to reinforce the new ways of working and sustain the collaborative environment Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013 33
  36. 36. How should insurers respond? 34 EY Global Insurance Digital Survey 2013
  37. 37. Section 03 How EY assists clients’ digital business development How EY assists clients’ digital business development EY Global Insurance Digital Survey 2013 35
  38. 38. 03 How EY assists clients’ digital business development Credential Innovation Center Credential Digital operating model 36 Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013
  39. 39. How EY assists clients’ digital business development Exhibit 10: EY Digital Strategy Canvas Our Digital Strategy Canvas is a visual representation of the EY method for digital strategy projects. It represents all the key elements that need to exist and be in alignment to create a robust and implementable digital strategy. The model is not linear; each dial informs and shapes the other as the project progresses. Vision Mission statement Financial objectives Corporate strategy Customer proposition & strategy Brand Customer objectives Digital initiatives Segmentation Benefits model Digital ambition Research & insight Personas Customer strategy Customer journeys Prioritization Digital road map Visualization Supplier shortlist Digital strategy Intentional customer experience Road map Supplier selection Business processes en m ge na ma t Customerdriven innovation Digital governance framework Risk & compliance Enabling capabilities Benefits realization People & operating model Technology & tools Partners & ecosystem m gra Pro Information & insight Program Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013 37
  40. 40. How EY assists clients’ digital business development Credential Digital analytics strategy and roadmap Credential Digital governance 38 Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013
  41. 41. How EY assists clients’ digital business development Strategy Technology and Analytics Understanding the Distribution Culture Mobile Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013 39
  42. 42. How EY assists clients’ digital business development 40 EY Global Insurance Digital Survey 2013
  43. 43. Conclusion EY Global Insurance Digital Survey 2013 41
  44. 44. How EY assists clients’ digital business development 42 EY Global Insurance Digital Survey 2013
  45. 45. Section 04 regional highlights EY Global Insurance Digital Survey 2013 43
  46. 46. 04 regional highlights around the barriers to digital progress and future investment than their global peers. One reason may be that the region’s developing and emerging nations are at an earlier stage in their digital journey. Although Australia aligns more with the digitally developed European and US markets, it is outweighed by the large number of Asian countries included in representative of Asia. 44 Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013
  47. 47. Only 7% of regional respondents see “regaining more direct control of the customer relationship” as a driver, compared to 20% globally. Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013 45
  48. 48. Americas The scope of the Americas region in our survey comprises a diverse range of countries. For example, direct insurance and direct to consumer marketing are still only just emerging in Latin America but much more developed in North America. Nonetheless, the region has much in common across many indicators of digital advancement, from budgetary spending, to customer engagement. Legacy technology constraints are the top 46 Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013
  49. 49. 57% use online customer engagement in product development and market research versus 34% internationally. Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013 47
  50. 50. Europe Our results show Europe lagging behind other regions in current capability and immediate investment plans, with insurers rating themselves at the lowest digital maturity level. In many industry sectors services, the customer services environment and loyalty management are well-developed. Our discussions with European insurers have services to set a benchmark of where they should aim. Insurers may therefore be judging themselves against a higher benchmark than perhaps their peers in other global markets. 48 Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013
  51. 51. Europeans are spending less on digital in 76% rate themselves as basic in using digital to reduce costs to serve customers, compared with 55% globally. European insurers perceive Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013 49
  52. 52. Exhibit 11: Top inhibitors of digital growth in the insurance market, by region Global Americas Europe Legacy technology constraints Slow pace of delivery by insurers 64% 35% 76% 93% Intermediary/agent channel strength or resistance 40% 34% 41% 48% Lack of a compelling business case 33% 41% 32% 26% Regulatory restrictions/environment impeding digital growth 32% 44% 20% 29% Perceived customer/data security issues 24% 40% 19% 7% Insufficient consumer demand 50 80% 63% 96% 86% 19% 33% 13% 7% Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013
  53. 53. Exhibit 12: Online vs. mobile digital functionality, by region Online Mobile Global 72% 43% Asia-Pacific 83% 44% Americas 80% 53% Europe 48% 30% Global 66% 35% Asia-Pacific 70% 41% Americas 76% 44% Europe 48% 16% Global 74% 40% Asia-Pacific 69% 37% Americas 83% 50% Europe 70% 34% Global 39% 23% Asia-Pacific 45% 32% Americas 50% 35% Europe 32% 21% Provide quote Transact/purchase Provide self-service facility Online claims Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013 51
  54. 54. Exhibit 13: Current and target future state levels of digital maturity, by region Global target future Europe current Europe target future Americas current Digital strategy and leadership Global current Americas target future 1 2 3 4 5 1 2 3 4 5 Do you see your organization as a digital leader in your industry? Do you have a business case for digital and is your investment integrated into the financial planning of the company? Do you have a clear, well-executed implementation plan for your digital strategy? Do you have the right operating model in place to deliver and run digital capabilities? Has your digital strategy got support from senior management? Do they lead by example? Customer experience How does digital inform and support segmentation? How do you use digital channels to attract prospective customers? How do you manage and build brand loyalty through digital channels? How does digital support your Customer Value Management? (Including cross-sell, up-sell and retention efforts) How do you reduce your cost to serve using digital channels? All average scores on scale 1-5 52 Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013
  55. 55. Additional reading from EY Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013 53
  56. 56. Additional reading from EY 54 EY Global Insurance Digital Survey 2013
  57. 57. Additional reading from EY EY Global Insurance Digital Survey 2013 55
  58. 58. Contacts Shona Burns Christine Delany May Knight and Russel Lok 56 EY Global Insurance Digital Survey 2013
  59. 59. Contacts Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013 57
  60. 60. EY Contacts About EY ey.com 58 Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013

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