Digital technology is transforming the insurance industry, creating both risk and opportunity. This white paper, by Ovum, explores the changes.
No stone left unturned.
Digital transformation is a reality across every sector. When information technology goes looking for processes, systems or interactions to disrupt — no stone is left unturned. And the insurance industry is no exception.
Today’s insurance consumers expect anytime, anywhere access, and they demand a customer experience on par with the top online retailers. But that’s just the tip of the iceberg in regards to the pressures currently causing strain for insurance CIOs and CTOs.
To give you an idea of what exactly is going on — and to help insurance IT professionals plan successfully for the future — let’s take a look at some of these other pressures, as well as potential solutions.
Meeting customer expectations.
First, let’s look at the challenge we already touched on — customer demand for a more integrated, user-friendly and multi-channel service platform. This means insurers need to offer services over voice, chat, SMS, online, app and/or video. And this is a demand that insurers have to meet while simultaneously supporting the growth in interaction volumes that are a direct result of these digital channels.
Boil it down to IT terms, and this means insurers require ever-higher levels of performance from their network infrastructures.
A need for speed.
Another major challenge for insurers in the digital age is the need for networks to cope with the speed of change. This comes in two parts. First is the customer, who now expects frequent improvements to technology — i.e. mobile apps. Second is the need to respond rapidly to new market opportunities.
Historically, insurers could get away with a development process of 12-24 months. In today’s digital environment, insurers have to be agile enough to create new propositions, develop sales/marketing campaigns, or react to their competitors — all within weeks, if not days. This is particularly important in an industry that’s seeing low levels of natural growth, forcing businesses into fierce competition for a bigger market share.
For IT, this means insurers need a network that offers a whole new level of agility.
The unfortunate reality of digital transformation is that it goes hand in hand with a higher risk to cyber security. And, while security has always been important to the insurance industry, the growth of digital services and technology has made cyber security a mission-critical requirement for insurers. On top of this, the world of cyber crime is also growing, both in size and strength — and insurance companies are a common target. Professionally organised fraud claims, for example, are on the rise.
Because cyber crime poses a threat both internally and externally for insurers, security measures need to cover more than just the internet gateway — they need to protect the entire network, including data centres, head office, regional offices and WAN infrastructure. No easy task.
Technological solutions for digital challenges.
While new technologies are the cause of these challenges, it’s in new technologies that we can also find the solutions.
The two that immediately come to mind are software defined networks (SDNs) and the cloud.
In effect, SDNs would allow insurers to upgrade or change their physical network at will, without affecting the overlaying network. This means insurers get the speed, agility, simplicity and flexibility they need to stay competitive and meet consumer demands.
Meanwhile, the cloud — specifically a mixture of private and public clouds — offers insurers an even greater level of flexibility within their IT, as well as stronger, more assured, security.
Find out more.
What we’ve talked about here is really just a fraction of the story. To find out more, make sure to download the new white paper, from Ovum. It’s called: ‘Creating a network for the digital insurer’, and it’s filled with research, analysis and advice — dealing with everything we’ve talked about here, and more.