“The historic insurance sector may have lagged behind its close counterparts in financial services and other industries when it comes to embracing innovation, but C-suite leaders are waking up to the huge opportunities. Customer interactions are increasingly led by chatbots, drones have significantly reduced the time to damage assess a disaster and insuretech startups are enabling consumers to file claims and get paid in minutes.
If concerns about digital disruption weren’t already causing ripples in the boardrooms of incumbent insurance firms before coronavirus, they certainly are now. Digital offerings leapfrogged seven years of progress in a few short months of the pandemic, according to research by McKinsey, and drove a surge in interest in accelerating digital transformation within the insurance community to help embed operational resilience.
As exciting as that may sound for insurance customers, one key barrier has traditionally stood in the way of any digital acceleration: legacy. Nine out of ten legacy insurers struggle with archaic infrastructure, according to a study by operations management and analytics firm EXL, and many are still stuck on systems from the 1970s or 80s. Meanwhile, agile startups are able to better meet their customers’ expectations.
“There was certainly a big surge in insurance companies coming to us wanting to speed up their digitalisation programmes and operational resilience was a principal reason.”
- Raghav Jaggi, senior vice president at EXL
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