The emergence of technology and its application to service delivery has produced new market giants in the last few years of the nation’s insurance industry. The new giants are showing a clear departure from the old order, in terms of service delivery and customer relations; product development and distribution as well as corporate image, speaking of the huge investment they are making in technology. Their bottom lines also reflect the technology impact, indicating that this is the way to go if the industry must catch up with the rest of the world.
Like Bala Zakariya’u, industry icon and chairman, Niger Insurance plc puts in one of his recent presentations during an insurance industry forum “We cannot continue to do the same old thing and expect a new result; technology is the way to go if we must catch up with the rest of the financial services industry players.”
At the global level, analysts from Deloitte Consulting explained that as more insurers look to transform their operating environment, technology investments are moving to the front burner for life and annuity carriers, across the industry’s entire value chain.
From the evolutionary advancements of enabling systems to the revolutionary capabilities of more disruptive elements, insurers should be positioning themselves to take advantage of the opportunities for gains in flexibility and efficiency, or risk falling behind in the technological arms race.
According to the analysts, despite prior investments toward tech modernisation, many organisations still have deficiencies to address, such as legacy systems that impede data management and analysis.
At many insurers, the tech infrastructure is either too rudimentary or lacks the predictive tools to adequately support the accelerating role of advanced analytics. These enabling systems will require re-examination due to the upsurge of emerging applications to enhance or reinvent underwriting, distribution, customer engagement, and other critical areas.
As a result, carriers are considering adoption of more disruptive technologies to address increasingly fluid and sophisticated preferences and expectations on the part of consumers and intermediaries.
For example, tech-savvy agents, brokers, and financial planners covet online and particularly mobile technology capabilities for more engaging customer interactions.
While incorporating new tech systems, insurers need to beware of their susceptibility to increasingly sophisticated cybercrime and data privacy breaches.
What’s new for 2014?
Covering the entire gamut, from distribution to data management, investing in technology will continue to move to the forefront of insurers’ 2014 agendas.
Insurers will consider investments in enabling technology, as the increase in volume, velocity, and variety of external data may stress the sector’s aged infrastructure, threatening to overwhelm enterprises that haven’t yet tackled the primary impediments to information management.
Moreover, to more effectively capitalise on advanced analytics and predictive modelling, insurers will likely boost investments in organisational and systems modifications to better leverage data as a strategic asset.
Predictive analytics could fuel a growing number of functions for insurers; including behaviour-based pricing as well as target marketing based on predicted interest, perceived value, and anticipated life events.
The bottom line
The improving economic environment can provide life and annuity carriers with an opportunity to invest in large, transformational technology projects to meet the evolving demands and expectations of customers and channel partners alike.
Insurers should accelerate efforts to modernise their systems to enable fluency and compatibility with digital platforms and new sources of data. Tech upgrades should embrace data analytic capabilities to enable more targeted marketing campaigns, better pricing of risks, and a personalised customer experience.
In line with technology modernisation, insurers should continuously re-examine and upgrade their ability to protect sensitive customer data from the prying hands of cyber criminals.
By: Modestus Anaesoronye