This report focusses on digital transformation in the Insurance sector, enabled by the key
technology groups that are the focus of Transforma Insights’ research.
The Insurance sector is amongst the most susceptible to digital transformation-enabled change of all industries. At the core of insurance is the concept of risk-transfer (from an insured party to an insurance carrier) and the availability of more high-quality information about a risk and enhanced analysis of that information, which can result in more accurate pricing and a more efficient market overall. Disruptive digital technologies such as IoT allow insurance offerings to be extended to support new propositions (such as insurance for servitised assets) and enhance services in already-established markets (with, for instance, usage-based insurance and new types of parametric insurance). Artificial Intelligence can play a significant role both in automating processes (for instance claims processing), and also in terms of assessing risks at a level of granularity that might not have been feasible before.
Overall, we have identified nine key domains of change in the Insurance sector that are enabled by digital transformation. These are discussed in more detail in this document and comprise:
▪ Claims Automation, which considers the digital transformation of claims processing
using a range of technologies.
▪ Associated Services, considers the augmentation of a core insurance offering with
associated services such as connected monitoring devices or monitoring services,
potentially in association with a channel partner.
▪ Parametric Insurance, which is an emerging type of insurance that offers pre
defined pay-outs based on trigger events, rather than the more traditional approach
which is to compensate for actual losses.
▪ Usage-Based (Automotive) Insurance, tracks driving behaviour via telematics
devices installed in the insured vehicle and potentially rewards users with a subsidised
premium, based on their driving behaviour.
▪ Improved Front Office Operations, which has been a focus of the insurance
industry for many years and has now evolved to use AI (and RPA) to improve
operations.
▪ Improved Analytics, including the analysis of better information and improved
analyses applied to available information.
▪ Servitised Asset Insurance, covers a range of opportunities related to servitised
assets, including policies covering repairs for those assets, and also insurance for
consequential losses in the case that servitised assets malfunction.
▪ Supply Chain Insurance, considers opportunities related to insurance services for
‘connected’ supply chains and also related risk-management services.
▪ Smart Contracts, exist to ease the contracting process between an entity requiring
insurance and an insurance carrier.
Collectively, the activities listed above will bring significant changes to the insurance industry.
This report focusses on digital transformation in the Insurance sector as enabled by the key technology groups that are the focus of Transforma Insights’ research. These technology groups include:
Clearly not all of these technology groups are directly relevant to the insurance industry (for example, Autonomous Robotic Systems), but many are very relevant (including, IoT, Artificial
Intelligence, Distributed Ledger, and others).
Accordingly, the aim of this document is not to chart the future direction of the insurance industry, but to highlight key areas of change enabled by new and emerging technologies. The bulk of this report (Section 4) is concerned with discussion of these key areas of change, including an overview of each area, together with analysis of the business impact, and the complexity, timings and risk associated with each area. We also identify key enabling technologies for each area (from the list above) and provide summary details of illustrative case studies that are available in Transforma Insights’ Best Practice & Vendor Selection database.
The purpose of the document is two-fold. Firstly, from the perspective of a practitioner in the insurance industry, the document highlights new and emerging aspects of change that can be expected to impact the industry in the next few years. Secondly, from the perspective of
potential vendors to the insurance industry, it highlights key emerging areas of opportunity to sell new products, services, and solutions to the insurance industry. Our analysis of the key technologies that enable each of the identified areas of digital transformation will help vendors of horizontal (technology-specific) capabilities to identify the contexts in which they may be able to secure new business from the Insurance sector.
Specific exclusions from the scope of this report include migration of existing computer platforms to the cloud, multichannel opportunities enabled by pervasive technology adoption, insurance associated with the ‘gig economy’, self-driving cars, and the role of insurance comparison websites.
If you have any questions about the content of this report or would like to speak with the author or any other analysts on any topic, you can make use of our Analyst Enquiries service by emailing enquiries@transforminsights.com.
