The next big competitive advantage in insurance will be created by the ability to capitalize on “momentary markets,” or personalized policy and service offers tailored to customers' unique life moments and delivered in real-time, according to a new report from Accenture.
The report noted that we are entering a new “post-digital” era, where success is based on an organization's ability to master artificial intelligence (“AI”) and other new technologies. The post-digital era does not mean that digital is over but, rather, that it is no longer a differentiating advantage – and now the price of admission.
As technology-driven interactions created an expanding technology identity for every consumer, insurers could tap into customers' digital demographics to deliver hyper-personalized, on-demand services meeting customers' specific needs, according to the report. More than four in five respondents (84 percent) who participated in the survey said that they believed that digital demographics gave their organizations a new way to identify market opportunities for unmet customer needs.
The report noted that although the average insurance customer engaged with his or her insurer only once or twice a year, insurers were looking to increase engagement through real-time risk protection and mitigation services. Three in five insurers (60 percent) already were using technology to build products or services to boost the frequency and quality of customer engagement, with another 35 percent planning to so in the next year.
“There's an opportunity for insurers to increase and improve their touchpoints with customers and forge a stronger, more personalized experience by harnessing customers' digital footprints, but they'll need to digitize their core before they can reach these new heights,” said Daniele Presutti, who leads Accenture's insurance practice in Europe. “Most traditional insurers are behind the curve in this 'post-digital' world, with a heavy reliance on mainframe technology. This makes it difficult for them to explore opportunities in the cloud and technologies such as AI to transform their operations, accelerate time to market, and improve security. It also makes them vulnerable to the early adopters of these technologies as well as the nimbler 'post-digital' upstarts.”
Meanwhile, three in five insurers (59 percent) were forming distribution relationships with non-traditional partners to reach customers in new ways and create new value for them. While this was encouraging, Accenture said, only one-quarter (26 percent) of respondents knew for sure that their ecosystem partners were working as diligently as they are to improve their security resilience. Leading insurers will recognize that as they collaborate with entire ecosystems to deliver new products, services, and experiences, security must be a priority.
The report also suggested that failure to master social, mobile, analytics, and cloud (“SMAC”) technologies would leave insurers unable to serve even the most basic demands of a post-digital world and prevent them from embracing the next wave of digital disruption – distributed ledger technology, AI, extended reality, and quantum computing (“DARQ”). This new set of technologies will let insurers reimagine the entire industry and its role in the world.
“For insurers to excel in the 'post-digital' environment, they've got to become more agile and implement SMAC as a core competency before they can rotate to newer technologies, including distributed ledger technology and AI,” said Jim Bramblet, who leads Accenture's insurance practice in North America. “They'll also need to carefully choose the customized and on-demand customer experiences they want to target and work backwards to map out how to get there, determining which ecosystem partners they need and where their place in that ecosystem will be.”
Victoria Spears
Victoria Prussen Spears is senior vice president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. A graduate of Sarah Lawrence College and Brooklyn Law School, Ms. Spears was an attorney at a leading New York City law firm before joining Meyerowitz Communications. She may be contacted at [email protected].