Developing digital capabilities key for U.S. insurers: study

Developing digitally-enabled capabilities is a high priority for insurers in the United States, with initial priorities focused on improving operations like billing/payments, sales and marketing, and eService for customers and agents, according to a new study from Majesco.

The report Digital Readiness in Insurance was released on Thursday and based on a survey of 45 Majesco property and casualty and life and annuity customers, the global provider of core insurance software, consulting and services for insurance business transformation said in a media release.

The survey found that initial priorities were focused on billing/payments, sales and marketing and eService for customers and agents, all of which were rated important by nearly 90% of respondents. However, despite the high priority of developing digital capabilities, over half of those surveyed characterized their company’s business analytics maturity level as basic and only 9% considered their capabilities to be advanced.

While developing digitally-enabled capabilities is a high priority, most companies have not yet achieved meaningful levels of digital maturity, the survey found. “Also noted is that insurance suffers from a perception problem with consumers due to its complexity, jargon and intangible nature,” the release said. “This makes it even more important for insurers to adopt new technologies to make it easier for consumers to understand, buy, own and use insurance, before new competitors disrupt the industry.”

Nimish Sankalia, senior vice president of insurance services with Majesco, said that the company realizes that the balance of power has indeed shifted from insurers to consumers in this digital economy, led by technology advancements and demographic shifts. “Insurers are looking for digital solutions that put the focus on their stakeholders, as compared to their traditional product-centric philosophy that has led to siloed back-office operations, processes and systems,” Sankalia said in the release. The ability to aggregate new and disparate data sources and create actionable and insightful decision-making through analytics are also cited as critical needs for digital initiatives by our carriers.”

Other key findings included the following:

• Respondents were nearly unanimous in their agreement that creating a strategic foundation for the future was the key driver for a digital strategy;

• Improved customer satisfaction was the top ranked benefit and measure of digital success, followed closely by increasing sales and improved operational efficiency; and

• Despite awareness of digital capabilities’ importance, most operations are currently weakly supported by digital technologies like mobile or portal such as billing/payments, where less than 40% are fully supported and only 14% for the First Notice of Loss process.