In the new Digital economy where Customers are demanding personalised, transparent & seamless customer journeys over multiple digital devices as standard Are Insurance companies prepared?

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Five disruptive pressures in today’s insurance market
1. Shifted Consumer
Demands, Expectations and
Behaviours
2. Exponential Growth in
Structured & Unstructured
Data Forms
3. Decreasing Margins
Forcing Insurers to
Dramatically Cut Cost
4. Increased Competition
from Fintechs & Industry
Outsiders
5. Potentially Disruptive
Technological Trends such
as the Internet of Things (IoT)
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3. According to IDC insurance companies are planning large IT investments to respond to
market trends
1. Global Insurance Technology Investments Will Reach Almost US$101 Billion in 2015 as these support
campaigns that boost efficiencies and innovation
2. Legacy Modernization will gather momentum with zero-tolerance for infrastructure failure and demand
for reliability and availability, driving the adoption of modular approaches to upgrades and replacements
3. Insurers will be under pressure to enhance processes efficiencies and reduce cost for core
operational functions such as policy administration, underwriting, and claims performance
4. Customers will be increasingly shaping the policyholder-Insurer relationship and influencing Insurers'
customer-centric strategies
5. Insurers' channel outreach will be increasingly digitally driven, transforming their
distribution delivery with up to a third of Premium Sales transacted via Internet-enabled computer or mobile
devices and social networks by 2018
6. Potentially game-changing, disruptive technologies stemming from the Internet of Things (IoT) evolution
will raise Insurers' competitive advantage
Source: International Data Corporation (IDC) “Global Insurance 2015 Top 10 Predictions: Perils and Prospects for the New Year”, 20153

4. Consumers are demanding personalised,
transparent & seamless customer journeys as
standard ... resulting in the emergence of the
individual-centered economy
Consumer behavior and digital capabilities
challenge the organization-centered economy…
Individual*-centered
economy
Organization-centered
economy
 Consumers expect experiences “my way”
 Channels are integrated for seamless
experiences
 Micro-segments are employed
 Ease of use and curation
 Big Data and analytics underpin capabilities
 Organizations drive consumption
 Channels are governed by different
incentives
 Each channel provides a different consumer
experiences
 User experience may be less intuitive
 Focus groups and market research represent
consumer input
*Individual is a customer, consumer, citizen, etc.
Market pressure 1

5. The ‘Purchasing Experience’ has been revolutionised. The Insurance Industry will
need to transform if it is to keep up with Consumer expectations.
 Consumers are demanding personalised, transparent & seamless customer journeys as standard
 At present, agent-based services still rank as the most important, especially in North America and the Asia Pacific
region where, respectively, 47% and 49% of responders ranked face-to-face communication as ‘very important’
 However, within three years, online assistance - usually a combination of phone or online connectivity - to
supplement a ‘self-serve’ approach is expected - to exceed face-to-face in Europe and attain near equivalence in
North America and Asia Pacific on the same measure (The Economist Business Unit, 2015)
 The days of defining ‘customer journeys’ from a central point with clear inputs and outputs, have gone as consumers
use mobile technologies to disrupt and reshape the dialogue. One estimate states that insurance sold through
digital channels could reach 25 billion annually in Europe alone as soon as 2016, more than double its 2012 value
(research – Global Futures and Foresight)
 Gartner research in the US underlines this blurring of consumer attitudes as customers transfer their experiences
with online retailing into insurance. Logically consumers are beginning to ask why the insurance sector cannot
provide services and products in a similar way
Ominously, Gartner states: ‘Delivering this type of customer experience
will require a level of digital maturity that most insurers
do not possess today, and that will be increasingly
business-critical for insurers’
Market pressure 1

6. GENERATING BEHAVIOURAL
CHANGE
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Almost 60% of motor business via aggregators 30% buy on
price alone 58% comfortable with Telematics 40% think
premiums too high 60% buy on-line 35% of the ‘new
wave’ will only deal with a ‘highly connected’
company
Disruptive Enough?