A recent industry report has found insurers are struggling to develop digital strategies that align with their business objectives.
The KPMG report, Transforming Insurance: Securing competitive advantage, says integrating data technology into existing systems and operating models is most often the biggest challenge insurance companies face in attempting to capture data.
More than 30% of respondents say the leading challenge with data analytics is capturing reliable data, and 35% of those cited legacy systems as the underpinning issue.
“Our research shows that the industry recognises the imperative of reinventing operating models to respond to and capitalise on digital technologies,” says Richard Marrison, KPMG Australia’s Head of Insurance, “but it also shows that insurers are struggling to develop digital strategies that align with their business objectives and to resolve legacy business processes and supporting IT infrastructure.”
Key insights from the survey revealed that respondents understand the importance of emerging technologies in helping to reinvent dated operating models and product delivery channels, or perform sweeping re-engineering of end-to-end management.
“Many Australian insurers, who have traditionally distributed through intermediaries, are looking for additional and complementary ways to distribute their products, either directly to consumer or via ‘white-label’ arrangements,” Marrison says.
“All are focused on adopting digital technologies that exploit all available data to tailor better offers for their customers, one that reflects a fuller understanding of the consumer’s needs and behaviours.”
The report also revealed only a little more than a third say their digital initiatives are aligned with their company’s strategic objectives. More than half of respondents identified human barriers to implementing a data and analytics strategy rather than technical constraints.
“The message is resoundingly that, for competitive advantage, insurers must fundamentally change their organisation by attracting and rewarding talent and building a truly agile, collaborative culture, leveraging technology from strategy to core processes to build sustainable competitive advantage,” Marrison explains.
The research was conducted globally between May and July.