Insurers should focus their digital investment more on their customer experience in order to drive their wanted business growth, research by Infosys shows. With the customer more and more in control, insurance companies should adapt to this, making sure that all customer interactions meets their digital needs. The biggest obstacle holding insurers back from leveraging their digital technology in an effective way is the lack of the right digital skills.
IT, outsourcing and consulting firm Infosys recently released a new report into the adoption and execution of digital strategies among insurance companies in the US, UK and Germany. The report is based on an online survey of 200 senior IT and business decision-makers in the insurance sector conducted by Forrester Consulting* on behalf of Infosys.
The research shows that insurance companies in the US, UK and Germany are acknowledging the impact digital can have on their business, with most of them well on their way “to making the most of digital strategies in their business.” Almost half of respondents (41%) believe that digital initiatives will lead to a competitive edge and 50% say that digital decreases their operation costs by 1-5%.
The majority (47%) of companies cite revenue growth as their #1 business priority for their digital strategy in 2015, followed by the creation of a unified customer experience (44%), driving market share growth (44%) and gaining better insights and predictive data on customers (44%). In the UK, the percentage of insurers citing revenue growth as their top priority is even higher, at 56%.
According to Infosys, insurers should focus their digital investment on the customer experience, as customers are in the ‘driver’s seat’ in the interconnected world of today. The digitalisation allows customers to be better informed and more aware of their options and wishes, resulting in the need for insurers to ensure that all interactions with their customer meet the user experience that they expect to have.
To influence their customer experience, 36% uses digital to improve personalisation, while 35% leverages digital technologies to enhance their processing capabilities. Creating and delivering an omni-channel experience is mentioned by 32%, with 38% of UK insurers identifying this as a key digital enabler.
A lack of the right digital skills is the main obstacle preventing insurers from effectively leveraging their digital technology, with 24% of respondents struggling with this. A lack of business priority given to digital is the #2 obstacle (19%), followed by a diverse digital technology ecosystem at third place with 14% citing this.
Commenting on the results, Manish Tandon, Executive Vice President and Head of Healthcare, Insurance and Life Sciences at Infosys, says: “While many insurance companies have developed effective ways to leverage digital technologies to engage with customers, too many are not putting the customer experience at the heart of their strategy. This technology led, ad hoc approach to digital will not work. Best practices in insurance and examples from sectors such as retail consistently show that being laser focused on customers, and using analytics to develop a deep understanding of customers, are the most important factors in getting digital right.”
* Forrester Consulting is a firm that provides independent and objective research-based consulting.