Insurers to Increase Mobile and Internet Channel Investments

A new survey found that insurers plan to invest over $84 million over the next three years to improve their multi-channel distribution strategies. The survey, commissioned by Accenture Plc., asked senior executives at 125 major insurance companies around the world, equally divided between life and P&C insurers.

Focal Points:

• According to a new Accenture survey, nearly two-thirds of 125 global insurers do not consider their current distribution strategies as competitive. As a result, insurers plan to invest $84 million, on average, over the next three years to improve their mobile capabilities, digital marketing, including social networking, and channel integration, the survey indicated. Only a small percentage said that they are currently investing in improving mobile technologies, digital marketing, and channel integration (19 percent, 34 percent, and 36 percent, respectively). The survey also found that a higher percentage are planning on or are considering increasing their investments in these areas (62 percent, 49 percent, and 44 percent, respectively).
• Additionally, the survey results indicate that insurers plan on increasing efforts to tailor their marketing strategies to specific customer segments. Approximately one-quarter of respondents said that they will customize their products, promotions, channels, services, and pricing strategies over the next three years. The survey found that only 14 percent of insurers are currently doing this.
• Insurers cite the emergence of new technologies, changes in customer needs and attitudes, new regulations, and advice in the distribution of insurance products as the main factors contributing to the shift in investment priorities. According to Accenture, over 60 percent of insurers said that all services will be available online within the next three years. However, only 21 percent predict these services will be available on mobile devices within this time.

Experton Group believes the insurance industry is not the only sector late to market to recognize the shifts in consumer demands. Early adopters that integrate the newer distribution channels into their business processes (and not make them separate silos) will gain a leadership advantage. However, the processes need to be customer-centric and user friendly rather than product or provider based otherwise customer adoption and usage will be limited. IT executives in a number of industries still have an opportunity to show corporate and line of business executives how to innovate using new technologies to drive revenues and market share. IT executives should take advantage of this window of opportunity and demonstrate their leadership, business acumen and innovation capabilities.