Insurers have demonstrated tremendous agility in the face of the pandemic
The Efma-Accenture report, “Realigning the fundamentals after Covid-19,” looks at the major trends evident from this year’s Insurance awards. We spoke with Jean-François Gasc, Accenture Managing Director for Insurance Strategy in Europe, about what these trends portend for the future of the industry.
Even though it is not listed as a trend, digital transformation is obviously important throughout this paper. What are the main challenges to achieving a successful digital transformation for incumbent insurance companies with legacy platforms?
The challenges are well known. The good news is that insurers have demonstrated their agility in adapting to the unprecedented situation of Covid-19, showing that to a certain extent, prioritization, focus and delegation can greatly help solve the main challenges:
• Lack of digital culture, agility and resistance to change: the speed of adaptation to remote working and more digital interaction has shown this may not be as much of a difficulty as a still quite vertical management style present throughout the industry.
• Old, siloed back office systems: this is and will remain a challenge, as re-architecting or migrating these systems require significant investments. The good news is that proven approaches are now well documented (digital decoupling, code transformation to migrate to the cloud, etc.) and that many companies have already defined their roadmap and/or invested to decouple a fair part of their front ends. Many companies have also started to leverage insurtech to accelerate delivery of some of their initiatives.
• Reallocating investments towards digital transformation. The Covid-19 shock has led many companies to re-assess their priorities and allocate more of their investment dollars towards forms of digital transformation or lower cost cloud-based solutions.
One of the trends is new ways of working. How can insurance companies help develop and ensure the next generation of the workforce is ready for working in the digital age?
The almost sudden shift to remote working to adapt to confinement has shown that it is entirely possible. The impacts are nonetheless multifold in terms of management style, need for technical and human support, and also the quite diverse expectations within the workforce, from employees who are very happy to work mostly remotely and avoid lengthy commuting to people wishing to work mostly in the office given their living and family circumstances. Most companies are therefore assessing or testing new approaches, with fewer mandating office presence and more importantly new KPIs and management approaches to better empower their teams while not falling in the trap of spying on their staff.
There was an insurtech category for the awards and outstanding solutions were presented. What is the current situation and the evolution of the collaboration between insurance companies and insurtechs?
Overall, I would say that we have moved to an era of mutual learning and collaboration between incumbents and insurtechs. Very few insurtechs will successfully operate as insurers or even brokers and many have pivoted their model towards offering forms of technology-intensive services to existing players.
Among these top trends, there is a very exciting one which is ‘Beyond boundaries.’ What will these new ecosystems launched by insurers look like in the next five years according to you?
We absolutely expect this trend to accelerate with insurers either launching ecosystems or becoming very active ecosystem players in the years to come. The very fast acceleration of digitalization that we have seen during phase one of Covid, and unfortunately in many countries phase two, will further blur boundaries between industries and incentivize both insurers and non-insurers to seek ecosystem-based approaches to better serve their customers.
The Innovation in Insurance awards were organized in the first semester of 2020. Six months later, with a little bit of hindsight, what are the main impacts of covid-19 in terms of insurance trends according to you?
We could already see some of them during this year’s awards:
• Increased focus on health and wellbeing and services to help clients stay safe and healthy.
• Certainly, acceleration of all forms of digitalization of the insurance value chain.
• And at the same time an increased need for human touch, with much more focus on seriously implementing multichannel approaches and reskilling the workforce to phygital ways of working and more advice in client sales and servicing.
• I would also expect a significant acceleration on leveraging the cloud as a means to access data and AI services and implement more agility into core system transformations.
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