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10 Actions to Transform the Insurance Industry

In spite of the tradition that characterizes Insurance, this industry today faces various technological, social, economic and regulatory challenges that force insurers to be prepared for change.

If we add to these global questions those inherent to the insurance business, it is clear that the sector must be transformed. Insurers must develop the appropriate capabilities to face challenges such as the need to find new margins, the pressure to become Insurance 'as a Service' enterprises, or the constant fight against fraud. And, at the same time, they must be companies guided by data and oriented to the creation or integration of new products to lead the current environment marked by Liquid Ecosystems.

We are talking about four forces that are transforming the Insurance Ecosystem: Insurtechs, insurers and their digital garages, new entrants, and the different regulations that affect the insurance realm.

Furthermore, it's not just about being open to change in a time of rapid technological advances, but also about the ongoing evolution of their business caused by the Forces of Acceleration. We are talking about four forces (or vectors) that are transforming the Insurance Ecosystem: Insurtechs, insurers and their digital garages (or innovation laboratories), new entrants (including Tech Giants and companies from other industries); and the different regulations that affect the insurance realm.

These companies must constantly renew themselves, offering new products, services, and innovative business models. And they have to do so from different perspectives and in a coordinated way between their different areas: technology, innovation, business, marketing...

To respond to these challenges, we believe that insurance companies’ steering committees must address them from different axes. The first of these, the one most related to the customer, seeks to align the insurer with the new way of creating products and marketing them in ecosystems: offering a digital CX adapted to the experiences they are used to in other industries, betting on intelligent distribution, creating combined products, becoming an 'as a Service' insurer and closely watching the impact of the Four Forces of Acceleration on their business.

The second axis would be related to technology, where we believe that insurance companies should commit to holistic data management and to being 'AI-driven' companies, focus on the efficiency and simplification of their operations, and accelerate the transformation of their IT systems.

Finally, insurers must pay attention to two fundamental factors: the management of unexpected challenges (such as pandemics or major natural disasters) and the cultural and talent changes that affect their professionals.

From our perspective, these are the 10 essential actions for insurance companies to be able to face their transformation needs. This transformation is already underway, it is unstoppable. The truth is that the actors who best know how to read these challenges and respond to them in the short and medium-term will position themselves as the great leaders of the insurance ecosystems of the future.

Header photo by Jacek Dylag on Unsplash

Carlos Ordóñez
Carlos Ordóñez
Head of Strategy & Advisory at NTT DATA Insurance EMEAL
Published on 23/11/2022
~ 2 minutes
Business Transformation

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