A digital imperative for insurance
Posted: Wed Jan 22, 2025 4:36 am
Given customer demands and an increasingly fractured and competitive landscape, insurance companies must be able to leverage data and insights quickly and effectively to stay ahead. The fact is, most insurers have terabytes of data from decades ago.
While companies have done basic reporting and metrics, they were largely unsure of how to leverage this data. Now, they are looking to develop predictive analytics capabilities to determine customer behavior and expectations. In Australia, for example, the focus is on savings with an emphasis on income protection. Meanwhile, Japan must adjust its policies to a rapidly aging population, while India’s young economy has quite different needs and demands.
With these regional differences in mind, the ability to perform detailed analytics for better business decision-making depends on having a digital platform that can access enterprise-wide data and leverage cloud capabilities such as machine learning and artificial intelligence.
Cost is another factor driving digital transformation in the industry. The chiropractor email list insurance industry has struggled with legacy systems, leading to higher costs related to system maintenance and upgrades. And since IT is one of the first departments to face cuts during recessions, it is often difficult to come up with the budget needed to keep mainframes and other technologies running smoothly.
Cloud-based digital platforms, however, move businesses away from a capital expenditure (or CAPEX ) model and toward an operational expenditure ( OPEX ) or consumption-based model, meaning IT relies less on board and C-level approvals for infrastructure. Instead, an S-as-a-Service platform allows the business to pay only for what it needs, adding capacity as needed.
A progressive journey
joke-insurance
Digital transformation is not a simple, overnight process and should not be equated with replacing an entire legacy system. For example, regulators in some countries require certain critical data to remain on-premises. Additionally, it may not make sense to move pure back-end operations from a legacy system to a cloud platform.
A transformational digital journey, rather, involves a hybrid approach that combines legacy solutions and digital technologies – many technology companies have experience in guiding insurers through this journey. For example, when an insurer starts to launch new digital products, it would make sense to use a digital platform to implement those products. Over time, the use of the legacy system would gradually be reduced, allowing companies to eventually move entirely to a digital platform.
Perhaps unsurprisingly, Asia is embracing digital transformation faster than many developed economies, partly because these are young and growing markets, and partly because of the sheer size of their populations. Another factor is that insurance penetration in many of these markets is lower than in developed markets such as the US, so there are avenues and opportunities for growth available, especially for more forward-thinking players.
Insurance companies, however, must walk a fine line as they transform, so as not to disrupt their core businesses.
While companies have done basic reporting and metrics, they were largely unsure of how to leverage this data. Now, they are looking to develop predictive analytics capabilities to determine customer behavior and expectations. In Australia, for example, the focus is on savings with an emphasis on income protection. Meanwhile, Japan must adjust its policies to a rapidly aging population, while India’s young economy has quite different needs and demands.
With these regional differences in mind, the ability to perform detailed analytics for better business decision-making depends on having a digital platform that can access enterprise-wide data and leverage cloud capabilities such as machine learning and artificial intelligence.
Cost is another factor driving digital transformation in the industry. The chiropractor email list insurance industry has struggled with legacy systems, leading to higher costs related to system maintenance and upgrades. And since IT is one of the first departments to face cuts during recessions, it is often difficult to come up with the budget needed to keep mainframes and other technologies running smoothly.
Cloud-based digital platforms, however, move businesses away from a capital expenditure (or CAPEX ) model and toward an operational expenditure ( OPEX ) or consumption-based model, meaning IT relies less on board and C-level approvals for infrastructure. Instead, an S-as-a-Service platform allows the business to pay only for what it needs, adding capacity as needed.
A progressive journey
joke-insurance
Digital transformation is not a simple, overnight process and should not be equated with replacing an entire legacy system. For example, regulators in some countries require certain critical data to remain on-premises. Additionally, it may not make sense to move pure back-end operations from a legacy system to a cloud platform.
A transformational digital journey, rather, involves a hybrid approach that combines legacy solutions and digital technologies – many technology companies have experience in guiding insurers through this journey. For example, when an insurer starts to launch new digital products, it would make sense to use a digital platform to implement those products. Over time, the use of the legacy system would gradually be reduced, allowing companies to eventually move entirely to a digital platform.
Perhaps unsurprisingly, Asia is embracing digital transformation faster than many developed economies, partly because these are young and growing markets, and partly because of the sheer size of their populations. Another factor is that insurance penetration in many of these markets is lower than in developed markets such as the US, so there are avenues and opportunities for growth available, especially for more forward-thinking players.
Insurance companies, however, must walk a fine line as they transform, so as not to disrupt their core businesses.