Insurers need to establish partnership models
Copenhagen, 6th March 2017: Sollers Consulting Experts explained during the Insurance Innovators conference in Copenhagen why insurers struggle to keep pace with modernization
Insurance companies will encounter problems when modernizing if they do not approach digitalization in the right way. “Insurers spend a lot of money on digitalization projects, but they seldom deliver the expected results”, said Marcin Pluta, Partner of Sollers Consulting during the Insurance Innovators conference in Copenhagen today. Digitalization has changed shopping behaviour but traditional insurance companies are still failing to keep up when it comes to adapting to these new consumer nuances.
“Nowadays it’s possible for Generation Z to acquire everything through their mobile devices and laptops. If anything falls below expectations, they can change the provider with ease”, commented Piotr Pastuszka, Manager at Sollers Consulting. Insurance companies address digitalization by investing in portals. However, this is not sufficient on its own. There are three major factors insurers should focus on in their digital transformation, Pastuszka pointed out today:
- The heart: Insurers need to provide new products quickly. The basis for that is a modern core system.
- The brain: Insurance companies should be able to utilize big data and advanced analytics to service customers in a more effective way.
- The appearance: There should be a multitude of ways to communicate with an insurer.
Insurers often fail with IT projects because they prefer custom made solutions and software instead of simplifying business processes. “Insurers usually want a lot more rules than are needed business-wise”, Pluta reported. Usually, the companies have a very detailed approach to modernization and tend to over-plan their projects.
With the rise of insurtech the insurance industry has come under pressure. 16 billion EUR was invested in start-up companies in the last five years. “Insurers need to innovate. Innovation is everywhere and readily available in the shape of Insurtech”, Marcin Pluta pointed out. More and more insurers are partnering with insurtech companies to increase agility and speed up modernization. “Insurers need to establish partnership models”, said Marcin Pluta.
Digital transformation is essential for innovation. Insurers should use a modern core system, open APIs along with flexible front ends. This will prove to be essential to build an ecosystem of partners and gain skills in using artificial intelligence, Marcin Pluta summarized.
During the Insurance Innovators conference in Copenhagen more than 150 high ranking professionals from the insurance industry in Denmark, Norway, Sweden and Finland are discussing new concepts of insurance. Managers from the Norwegian market leader Gjensidige, from the Danish market leader Tryg, from the Swedish market leader Länsförsäkringar and from startup companies like Next Insurance, Buzzvault, Gigga, Tribe, Paydrive and Tillit are talking about new threats as well as new challenges, the future of insurance and the relationship between insurers and their clients in a digitized world.