59% of insurers increasing investment in digital, says EIS

A survey from EIS Group indicates that, following the industry difficulties of 2020, the majority of insurers are now refocusing on digital transformation.

Using a representative sample of 1,057 consumers and 73 industry figures, EIS’s analysis indicates that a year indelibly marked by COVID-19 - Lloyd’s estimated the total cost to the global insurance industry could be US$203bn - has vindicated the application of digital technology across the board.

“Despite the chaos, the pandemic has highlighted the sheer importance of digital transformation,” stated Anthony Grosso, Global Head of Marketing. 

“The leading insurers of the future will be those who transform to enable digital ecosystems which place insurance at the heart of how consumers manage their financial lives. In 2021, we expect insurers will focus on this and invest in their ability to keep up with the needs of their customers.”  

Furthermore, EIS postulates that three core initiatives will drive corporate strategy in the year ahead:

• Accelerated transformation: as previously alluded to, the operational difficulties of managing a quality service during COVID-19 without digital infrastructure have been demonstrated. Only 1% of those surveyed stated that their investment would decrease in 2021, while 59% indicated that it would increase.
• Modern CX: nearly one third (28%) of policyholders cited a poor customer experience as the primary reason for leaving their insurer. Omnichannel capabilities, easier policy creation, and more intuitive customer platforms will all play a role in modernising legacy CX.
• Expanding services: leading insurers like Vitality have understood that the modern industry must offer more than just cover. By offering value-added services and placing an emphasis on well being, the company provides a case study on how to make insurance more proactive, engaging and bespoke.

On this last point, Phil Zeidler, CEO of DeadHappy, agrees. He told InsurTech Digital, “Fundamentally, general insurers are product focused and not customer focused. They think about risk and loss ratios, not customer experience aspects such as ease of access. 

“Often they’re removed from the distribution of their product: they outsource to brokers, aggregators, etc, and so they don’t understand their customer or where they’re being marginalised.

“Insurers have got to understand their customer and commit to understanding both the data they have and how they can enhance it through additional sources. They also have to understand consumers’ buying preferences and how they should redesign products to enable them.”