1) An EY report warns insurers that they need to take mobile and digital capabilities more seriously to avoid falling behind, as mobile usage grows exponentially. 2) The report found that only 43% of insurers provide mobile quotes compared to 72% online, and Asian insurers lag in using mobile apps and social media. 3) While most insurers aim to improve their digital strategies and investments, currently almost 80% see themselves as just "playing" digitally rather than being leaders, and two-thirds lack a long-term strategy to realize digital ambitions.

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Insurers warned about merely ‘playing’ with digital in
EY report
by Tracey Jones 22 Oct 2013 Be the first to comment
Insurers have been warned to take
mobile more seriously and not
merely ‘play’ at being digital leaders,
or be “left on the side lines”.
According to a new report from EY
published today, ‘Insurance in a digital
world: The time is now' they should also
be taking social media more seriously,
recognising its value as a relatively
inexpensive marketing tool and a means
to engage with and influence skeptical, digitally-savvy younger consumers.
The EY survey found only 43% of insurers currently provide mobile quotes
compared to 72% who provide these online. Even the non-life market, with
simpler, shorter-term products, significantly under-exploits mobile.
Asian insurers are less likely than their global counterparts to use social
media and mobile tools to interact with customers and agents: 30% use
mobile apps - lower than half the global ratio of 61%. However, they are
more likely than their global counterparts to interact with customers at
financial stages.
Graham Handy, EY's global insurance customer leader, said: "Insurers
focus on mobile products and services is limited. But with mobile and tablet
use growing exponentially, neglecting mobile is turning one's back on the
future."
The report draws a number of damning conclusions not least the
disconnect between ambition and level of investment among those
surveyed.
Fifty-seven per cent, of respondents said that they intended to have a
regularly updated digital business case and 78% aimed to have an
organisational structure to support their digital strategy within the next
three years.
Currently, however, almost 80% of survey respondents do not see
themselves as digital leaders, believing instead that they "only play the
digital game" or are "still learning to use digital capabilities for a
competitive advantage." More than two-thirds of insurers globally feel that
they have delivered some quick, easy wins but that has not been
accompanied by a long-term strategy to realize their ambitious digital
objectives, according to EY.
Sixty-eight per cent of respondents globally spend less than 10% of their
business and IT development budget on digital. A significant number of
Asia-Pacific respondents did not know current levels of digital development
spend: 79% versus 40% globally. Such lack of clarity is mirrored in their
view of expected future spend: 58% anticipate an increase over the next
year, compared to 80% globally.
EY concludes that legacy technology, slow pace of delivery and company
culture are also hindering the process. In the Americas, 96% cite legacy
technology constraints as a major impediment to growth versus 80%
globally. While in Europe, 93% say the slow pace of delivery by insurers
versus 64% globally hampers their digital ambitions.
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Insurers urged to
embrace digital
strategies
Globally respondents also consistently cite intermediary and agent channel
strength or resistance as one of the top three inhibitors in implementing a
digital strategy.
Nearly 50% of European insurers cite this as an inhibitor to digital growth
while only 34% of Asia-Pacific insurers believe this is an issue. However,
this reflects the central role that the intermediary plays in the Asia-Pacific
region.
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Handy said: "Digital is a new market force that is driving a massive change
in consumer expectations. Insurers cannot afford to be left on the side lines
of the move to digital. They must evolve and respond to constantly shifting
consumer expectations, but currently they are holding themselves back
due to internal factors, primarily technology and culture."
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He added: "Whether insurers can make the ambitious changes they
envisage within the next three years remains to be seen. Attaining their
goals will require significant - and rapid - improvement to close the current
gap. However, customers will demand considerable changes in how their
insurance is delivered, and the winners will be those insurers who execute
well against their digital ambitions in the coming years."
What is the claims environment like in
Asia? What are insurers doing to
manage increasing claims costs and is there sufficient
expertise in the market to handle future claims?
Watch Graham Handy in conversation with Incisive Media insurance
division editor-in-chief Jonathan Swift.
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