How do insurers' digital priorities stack up against banks?

February 28, 2023 6:58 AM

At the end of 2022, Digital Insurance parent company Arizent surveyed tech decision-makers across insurance, banking, mortgages and wealth management. The resulting 2023 Tech Priorities survey is available in full here. However, we've broken out some of the most important insights that are specific to the insurance industry. Some of the following data is compared internally to our industry, but some other is compared to peers so insurers can see where their sector stands among financial services. Read on to find out.

Somewhat surprisingly, security was cited as a top tech priority among tech decision-makers in all verticals, including insurance. In an environment where trust is paramount, but digital services are in high demand, insurers walk a tight line between opening up their tech toolbox and keeping customers' private data — of which they ask more every day — safe and secure.

It was in the second slot — data collection and analytics — where insurers stood out from the crowd. The big data era came to insurance about a decade ago, but was focused largely on digitalizing data insurers already had. Now, insurers are learning how to identify and ingest new data sources that not only weren't on the radar when they first began looking internally for insight, but may not have even existed.

Insurers and mortgagers had mobile apps in their bottom three priorities. However, there may be different motivations at work. Insurers surely understand the importance of the mobile and smartphone channels. But the use cases in insurance are different than simply checking accounts. Insurers have to be able to interact with customers via mobile to set up roadside assistance, or take and upload pictures of damage. Depending on all customers to have the most updated app and phone capabilities at these times of high stress is a tall ask.

That also plays out in the idea of a "mobile-first" development strategy, which is less stringent at insurers than other kinds of financial institutions. Insurers leverage the mobile web and SMS messaging at a high rate for their mobile services. Insurers also are big users of internet of things technology, which we will discuss later. So it's probably more accurate to look at the wide range of mobile technology leveraged in insurance rather than simply apps.

That shows up in the big gulf between insurers and other financial firms in use of Internet of Things. Encompassing everything from telematics devices to smart-home items to wearable technology, insurers of all stripes are making big bets on IoT. It shows that carriers aren't shy about using cellular technology and its developments.

Another specific technology we asked about was robotic process automation, or RPA. Insurers continue to leverage this and other next-gen technologies primarily in interactions with customers. In a higher-friction application process than other financials, the ability to automate some of the work away is paramount.

Circling back to priorities, we asked what business need is being met by tech investments this year. There's a clear marriage of technology and business with cybersecurity: It's a corporate priority, so it's invested in. Compliance coming it at a similar level probably reflects the close relationship between data protection and regulatory interest. From there, the customer experience still rules insurance from a more practical standpoint.

When it comes to the future, we asked firms what technologies they thought were likely to transform their business in the next couple years. Freed from having to only identify their current priorities, it gives a glimpse as to what's to come in insurance. APIs and mobile apps, for example, were in the bottom of current priorities; however, insurers see them as transformative in the near term. Perhaps what both needs are a few more development cycles so they can be scalably effective for insurance needs.

When it comes to the upcoming technologies with less hype, insurers seem to have the opposite view of mainstream tech. Blockchain and augmented reality are commonly discussed in the consumer press, but insurers see them as less transformative within this industry.