Leaping over transformation hurdles
We are excited to be featured in the April 2019 edition FAnews magazine. In this feature, our Chief Financial Officer (CFO), Kush Padia outlines the key hurdles for digital transformation in 2019.
Read below the full article below:
The pace of change in our industry is accelerating. Insurers, intermediaries and brokers who do not embrace this change are at a real risk of of falling behind the curve.
In the world of information technology, Moore’s Law is an interesting observation.
First observed in 1965 by Gordon Moore, the law speaks to the silicon chip and the projection that the number of transistors on a chip will double every two years, thereby doubling computing power.
While there are many opinions swirling at present around the demise of Moore’s Law, the principle around the disruptive power of technology is being lived in our industry.
Two years ago, there were few organisations in our industry with digital transformation on their agenda. Presently we have several innovative InsurTech’s and intermediaries leading the transformation and defining new distribution channels that are resonating with Policyholder 2.0.
Breaking down barriers
Technology has broken down the barriers to entry in the short term insurance industry which has caused a situation where a bespoke legacy system (previously considered a strength of the established players) is becoming the single greatest threat to their organisational relevance.
New market entrants are not limited to working within the confines of these legacy systems. They take a critical view of the insurance value chain and customer journey with their sole purpose being to improve and commoditise it.
While established players have the benefit of healthy balance sheets, a large sales force and slick claims processing, start-ups are able to move quickly when opportunities arise. This is a trait that is becoming more valuable as customers demand to see more innovative products that meet specific needs.
Of critical importance
It is critical for insurers, brokers and intermediaries to recognise that the needs of the customer of yesterday are vastly different to the needs and expectations of future clients.
Millennials represent the fastest growing client demographic presently in the financial services industry. As such, most of our product development and innovations is being adapted to suit the needs of this customer. This includes demand-based insurance as well as the development and adoption of mobile applications for self- service.
It is important to note that Centennials (born after 1995) behave very differently to the preceding generation. Their choices are informed and shaped by influencers. They are heavily dependent on, and quick to adopt new technology, are more in favour of the sharing economy and tend to search for a higher purpose in everything they do. These traits extend to the companies they choose do business with.
These behaviours present unique challenges and provide significant opportunities for service providers who demonstrate their commitment to meeting the needs of Centennials.
Chief Executive Officers, Chief Financial Officers and other business leaders will serve their organisations well by prioritising and actively taking steps towards disrupting their businesses from within.
When considering the change facing the industry, we should no longer use insufficient budgets as an excuse to delay innovation within our businesses. Capital constraints are a reality we all face in a tough economic environment.
A revision of company strategy, with a reprioritisation of projects and capital allocations, is key to ensure that businesses remain future fit and ready to embrace change.
This article is found on page 35 of the April 2019 FAnews magazine.