Digital revenues soar
Since no more than half of insurers can actually be above average, mathematically, time will tell which ones emerge as leaders, but the direction of travel is clearly uppermost in executives' minds.
While just over one-third of insurance respondents currently believe they’re ahead of their competitors in terms of digital capabilities, almost double that number expect to be ahead by 2023 (see Figure 2). Since no more than half of insurers can actually be above average, mathematically, time will tell which ones emerge as leaders, but the direction of travel is clearly uppermost in executives' minds.
So, amid the continued emergence of and interest in insurance startups and insurtechs, traditional insurers are moving ahead, quickly, with digital. In our study, the volume of revenue flowing through digital channels is expected to rise from 10% of total revenues this year to 16% by 2023, indicating that future success depends on APIs that can link seamlessly into legions of new customers and partners. These APIs support a flexible and robust technology platform that enables process improvement, greater efficiencies and faster product innovation.
The shift toward digital distribution models mirrors the changes in customers themselves. Consumers increasingly expect a holistic, personalized and proactive approach to life and wellness management, delivered instantaneously through the tap of a screen, with offerings configured precisely to what they need now.
The digital arms race heats up
Respondents were asked how their company compares with the competition in applying digital technologies to transform business strategies and processes, now and by 2023. (Percent of respondents saying “far ahead” or “ahead”)
Response base: 285 insurance executives Source: Cognizant Center for the Future of Work Figure 2