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“Technology drives competitive advantage in the insurance industry,” said Peter Manchester, Consulting Leader and EMEIA Insurance Leader at EY Global Insurance at Reuters’ Future of Insurance Europe 2020.
“The sector is at a turning point,” said Manchester. Constant demographic change, climate change and technology are fundamentally changing the business environment and require different responses from insurers if a company wants to stay competitive.
“COVID-19 has both exacerbated and accelerated these trends and maybe the future will come sooner than we all expected,” added Manchester.
Manchester talked about investing shifting as a persistent technological theme. Customers were forced to adjust to a new normal and the urgency for technology was more evident than ever.
“The insurance industry has no choice but to change,” noted David Germain, chief information officer at RSA. “We see a different generation in terms of how they want to act.”
Germain mentioned that executives should wonder how to create a fit for purpose system in which the environment mirrors online retail banking, rather than sticking to a pattern where customers only speak to their insurer once a year.
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Technology that works with basic products like auto and home insurance helps create a better value proposition for customers, said Germain. “When I think of technology, I don’t think of analytics or data science, but of what our customers want.”
“The technologies, architectures and structures that we have brought to the table no longer guarantee the right pace of cultural change in every company,” said Germain. “We need a different way of thinking.”
Germain also said insurers should think about which markets are most important in terms of customer experience, and then develop a strategy of which products and services to develop that are then underpinned with technology.
“Agility and competitiveness – that’s what customers expect from us,” says Germain. “We see an ecosystem of disruptors arriving faster than we do.”
The disruption of new technologies is inevitable. It is time for the industry to move away from specific platforms, focus on building an open market experience for customers, and reduce the burden of legacy technology.