Facing up to the challenge of having to satisfy increasingly savvy customers, insurance companies in Asia are expected to invest in IT solutions that will help them understand their customers better.
Research and consultancy firm IDC predicts that projects involving data integration and business analytics will be on the rise next year as Asian insurers try to tailor fit their products and services to demanding customers.
In the IDC Financial Insights report titled 'Asia/Pacific Insurance 2012 Top 10 Predictions: Strategic Initiatives for Insurers to Carpe Diem', IDC said looking into these new IT investments may be one of the strategies that Asian insurers can adopt in order to counter the possible effects of another economic downturn next year.
"As the very real possibility of another global downturn casts a pall over Asia Pacific's insurance sector, we see even greater urgency for players to forge ahead with a dynamic and lean business framework supported by the smart utilisation of technology," said Li-May Chew, CFA, associate research director, IDC Financial Insights Asia/Pacific.
Chew said focusing on data integration and analysis to boost customer experience is one of the "strategic initiatives" that Asian insurers can consider as they "venture guardedly" next year.
IDC also predicts that technology spending will grow from 5 to 10 percent next year, with some of amount to be spent on cloud computing.
Insurers would also do well if they can venture into smaller IT projects and refocus their resources on customer relationship management-related initiatives.
Another trend that IDC expects to see from the industry next year is the focus on different channels to reach out to customers. Since customers are now accessible through various channels or "interaction points," such as Web portals and mobile devices, IDC expects insurers to expand their distribution network to offer customers alternatives.
Other initiatives that insurers are most likely to take next year include implementing proactive measures to comply with regulatory and compliance requirements, optimising on business transformation initiatives, and raising productivity and allegiance of the agency force.
"Insurers will also be deeply engrossed in countering fraudulent activities, working on enhancing core insurance applications, and diversifying into ancillary lines of businesses," Chew added.
To survive 2012, IDC is recommending that insurers enhance their focus on the customers, review their product mix, re-assess their distribution strategies and reduce capital expenditures, innovate on their product design, and capture new business opportunities by addressing niche segments such as health, pension and micro-insurance.
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