24 Mar Shake-up of insurance industry not slowing
Members from TAS’s Executive Team attended the Future of Insurance Event in Sydney, which saw the industry’s leaders come together to discuss the latest industry challenges, digital developments and technologies shaping the market.
Among the highlights from the panellists was KPMG’s predication that the motor insurance industry will decrease by 60% by 2040. Key technology innovations, from AI, machine learning, Internet of Things, blockchain and driverless cars were broadly discussed, along with the call to industry boards to assess and act on the accelerating pace of change currently occurring in the market.
The key insights from this thought-provoking and timely event were:
Customer-led disruption is changing the industry. Millennials currently make up 46% of the workforce, which will grow to 75% by 2025, with a lifetime value of $10 trillion. They are the major pushers of disruption, with 40% of male and 33% of female millennials preferring to buy everything online, if they could. Changing customer expectations has led to an emergence of start-ups that offer services such as ‘instant insurance’ that directly plays to this audience. Many of the start-ups are driven by machine learning and robotics and are free from the hassles of legacy systems, in turn, offering quick, easy and efficient claims processes.
Innovation is a game-changer. Nearly three quarters of Australia’s financial services organisations view innovation as vital for the survival of the industry. However only 25% are actively pursuing innovation, with innovation barriers existing in a high number of companies. Price pressures and competition are highlighted as preventatives to change and growth, however, 77% say skills are more important than budget for building innovation programs. With talent a key enabler, it’s up to the organisations to engage and collaborate with these experts to reap the benefits.
Technology investment is key to staying relevant. The industry needs a greater focus on customer experience, and the right technologies to execute these plans will also be the best way to better understand consumers. The data gathered can offer ways of understanding and predicting behaviours and make customer experience delivery more seamless and rewarding for both parties. In order to meet rising customer expectations, digital experiences should be tailored for each customer, adapted to their particular situation and predictive of their behaviour, a concept referred to as ‘contextualisation’.