DLA Piper has launched Digital Transformation in the Insurance Sector papera global white paper examining the key legal, regulatory and commercial challenges facing insurers as they seek to navigate the increasingly advanced and innovative digital market.
The traditional models of the Insurance Sector are undergoing a substantial rate of change, spurred on by technological developments such as big data, artificial intelligence and agile working methods, as well as disruption caused by new business models such as peer-to-peer and the growth of Insuretech. and new market entrants.
The Digital Transformation report calls for insurers to innovate and embrace new business models in order to keep up the pace, with an effective digital strategy being cited as key to success.
Anthony Day, technology partner in the Insurance Sector at DLA Piper said: “Digital transformation has been dubbed the next industrial revolution and we are seeing now more than ever that it is has become a critical business issue across all sectors. It’s encouraging to see that Insurers are embracing change on a rapid scale and that they are seeking new ways to optimise their existing operations, processes, and sales channels.
“Those organisations that can harness and leverage the digital transformation and disruption we are seeing in the Insurance Sector through the implementation of a robust digital strategy, while still navigating the legal and regulatory risks, will be the ones best placed to capitalise on the current digital revolution.”
The white paper addresses six main themes and the challenges and opportunities stemming from these:
Redesigning the customer journey
The development of new products and tools to enhance the customer experience and journey as well as adapting for Generation C (Connected).
Agility and simplification
Insurers must behave more like start-ups in order to foster innovation. This includes adopting agile ways of working and transforming legacy systems and processes.
Rethinking traditional models
A shake up of the traditional business models will be required for Insurers to thrive in a digital world. Corporate venture capital, alternative business structures and tailored products leveraging new technology (e.g. artificial intelligence and internet of things) will be key here.
Machine learning and advanced analytics
Big data is an invaluable resource for Insurers but they must be careful to store, use and process data correctly so as to comply with existing regulations and the forthcoming European General Data Protection Regulation. Managing the competing regulatory and commercial interests will be strategically important for Insurers looking to unlock value from their digital strategy.
From people to software
Technology is driving changes in Insurers HR needs. From tensions between people and software to a need to “up skill” the workforce insurers must remain committed to attracting the right digital talent, the red hot resource in the market right now.
How digital is changing the regulatory landscape
Striking a balance between safety, security and innovation will be a key focus of global regulators in coming years. Insurers must be alive to compliance commitments whilst implementing new and innovative products to help build trust with customers.