Seizing the Opportunities of Digital Transformation
There is certainly nothing particularly innovative about using digital tools to achieve innovative results. However, there is a big difference between digitalising traditional products and creating products that take advantage of digital tools and the information they provide.
Digitalisation is not about turning paper work into computer files, it’s about reaching out to customers the added value benefits. Great examples of this are automotive telematics: usage-based insurance, navigation systems, traffic alerts, emergency services, smart car management systems and anti-theft solutions. It’s about providing more value and more services than a traditional insurance package. This is what insurance clients are seeking and what the most innovative insurance companies, assisted by Telematics Service providers are doing.
A recent Digital Innovation Survey by Accenture entitled Seizing the Opportunities of Digital Transformation has reviewed the opinions of 141 global insurance executives responsible for driving their company’s digital strategy. The report reveals not only that insurers are expecting to reap significant benefits from digital innovation, but also, and perhaps most significantly, that digital transformers – those companies whose digital strategies, investments and activities are truly innovative – are setting the pace for the insurance sector.
Indeed, according to Transparency Market Research, the global commercial telematics market will continue to register a CAGR of 18% until 2020, increasing from ca. $15 million in 2014 to over $45 million by 2020.
The Accenture Survey identifies six main elements that are vital to innovative, strategy-driven insurance companies:
- Insurers expect digital transformation to be a top priority over the next 5 years;
- Digital initiatives are expected to generate additional growth;
- Radical extension of the insurance value chain is key to success;
- The majority of insurers are Digital Followers, concentrating on incremental rather than transformative change;
- Carriers expect successful distributors to ride the digital wave;
- Insurers are expected to invest more than $40 million in digital projects.
The main issue, as always, is the need to strike a balance between two powerful imperatives: delivering profitable growth in the short term and making the necessary investments for long-term transformations.
Yet, while most insurers expect their value chains to be transformed over the next 5 years, only 47% have devised a digital strategy addressing the entire insurance value chain and, according to the Accenture Report, 59% of insurers describe their current digital investments and activities as merely exploratory.
Transparency Market Research is a market intelligence company providing global business research reports and consulting services. Our exclusive blend of quantitative forecasting and trends analysis provides forward-looking insights for thousands of decision-makers.
Accenture is a global management consulting, technology services and outsourcing company, with more than 305,000 people serving clients in more than 120 countries.
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