What should insurers do to leverage new technologies to address the challenges mentioned above?
As a first step, insurers should look into taking a more sensible, controlled approach towards boosting office productivity and increasing service standards. The best way to achieve this would be to shift basic office productivity and workflow processes into the cloud. It may not be a critical change to the overall infrastructure, but it is the first step in ensuring that you are equipped with the right knowledge and experience to make the change to the cloud deployment. Furthermore, it will also highlight to the relevant regulators that your company is capable of secure change, and is prepared to leverage new technology to improve services across the board.
Insurers also need to take into careful consideration the requirements of their specific client bases and alter offerings accordingly to better suit their clients' needs. For example, in commercial insurance, a simplification of document submission would be very helpful to their clients. The question that follows is: how do you identify those needs and what technology can you use to achieve those goals?
To do so, insurers should set aside more funding for digital purposes. Aviva is a good example of how international insurers are already taking steps to ensure this. The company has set up a facility, The Digital Garage, in Singapore that is specifically aimed at exploring ways in which technology can contribute to new insurance ideas and services for consumers. These initiatives tend to be separated from the company's in-house IT and the teams report directly to senior management. Such an arrangement allows for increased agility and the chance to test failures and fortes of solutions without impacting the company's main operations.
How will APAC's insurance industry change in the next few years?
Over the coming years, we will see the industry become more automated, which will inevitably result in the shifting or resource for many processing jobs.
As analytics continues to become more real-time, and more embedded in our daily lives and commercial operations, we will see a change in the price people pay for insurance, depending on their individual risk profile. Through data, policies will become more customised as the risk assessment of each person will become even more precise.
Within APAC, we expect to see a substantial rise in the amount of insurance purchased, particularly in the non-life area. As a region, APAC generally still lags behind traditional markets in terms of insurance penetration, but this should change in the coming years.
With more sharing economy type of business models coming into the field, there will be an upsurge in 'micro-insurance' -- short-term policies that cover specific services or risks such as ride-sharing.
Perhaps most prominently, the insurance industry will continue facing challenges from regulations and narrowing margins. In the fight to gain competitive advantages and reign successful, we expect to see a noticeable rise in the number of insurers steering away from self-hosting and instead outsourcing to third-party data centre providers such as Equinix.
Insurers will also turn to innovative methods such as establishing partnerships with external suppliers and specialist companies to provide the additional (and non-insurance) benefits that the modern consumer expects. These partnerships will be interconnected at a digital level, as the economics will not allow service provision to be any delivered any other way. By doing so, insurers will be able to improve product offerings to meet changing customer demands while remaining competitive and efficient.
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