US insurers are seeking speed and agility throughout their infrastructure for innovative product development and an enhanced customer experience, reveals a survey by SAP. The survey of 200 insurance executives at the IASA Annual Conference held in June found a number of factors motivating insurers' innovation strategies. 34% of respondents indicated that rising consumer expectations are their primary driver for new product development, followed by changing regulatory demands(22%) and availability of new technologies(20%).
Insurers are in agreement that the growing customer base of millennials-generally considered those born between the early 1980s to the late 1990s-has heightened expectations for their carriers. 55% of respondents cited convenience as millennials' top priority when seeking insurance products, with low cost(22%) and relationships with their agent(16%) followed by brand recognition(8%).
This has forced many insurers to consider a more adaptable product strategy. More than half(52%) of respondents noted that their primary strategy to reach millennials has focused on investing in online, mobile and social technologies to reach customers across channels. 21% indicated they are tailoring products to suit millennials' unique needs and 12% are investing in data analytics to segment and target communications.
Yet while insurers remain focused on the customer experience, updating their back-end infrastructure continues to be a priority as they seek to inject agility and speed throughout their processes. 51% of respondents indicated their organisation has adopted cloud computing in some capacity. While nearly half of these respondents have implemented cloud-based systems for back-office functions-anecdotally citing HR, accounting and procurement-others have adopted cloud for mission-critical functions like policy administration(18%), product development(7%), claims processing(6%) and risk management(6%).
"Cloud computing has matured and we're seeing insurers shift from leveraging the cloud for just back-office functions to implementing cloud across the entire organisation," said Ross Orrett, global head of Insurance Industry Innovation and Development, SAP. "Insurers are becoming more adaptable and laser-focused on meeting changing customer needs. To be innovative in its products and the way it serves agents/brokers and customers to meet these demands, carriers are investing in industrializing the back-end with integrated, agile infrastructure while innovating across these systems."
Insurers also acknowledged the barriers to cloud adoption in their organisations. One-third of respondents(34%) cited security concerns as the primary challenge for adopting cloud computing. Lack of internal buy-in was another key factor(28%), followed by budget and financial concerns(13%), unstable technological infrastructure(13%) and lack of time(12%).
The survey was conducted via in-person interviews held at the 2014 IASA Annual Conference in Indianapolis from June 8-10th. The sample includes 200 insurance executives in both life and health and property and casualty who attended the conference.
|
