Insurers face obstacles in meeting customer experience demands
Insurance carriers are expected to ramp up investments in emerging technologies this year, as the industry faces growing pressure from millennials and Gen Xers to modernize operations quickly.
That’s according to new Majesco analysis released last week. The report, “Future Trends 2017: The shift gains momentum," says that there are three key obstacles impeding carriers from providing the digital experience tech-savvy consumers want. Majesco categorizes these hurdles as “people," “technology,” and “market boundaries” in its report.
The report asserts that insurers are struggling with staff shortages, especially in the technology department. As the experts in their legacy systems retire, it impedes insurers' ability to rotate out these systems in favor of more modern solutions that support next-generation priorities, like advanced data and analytics. While that's going on, insurers face competition from more external forces than ever before in the growing "insurtech" movement, which is better able to meet customers' desires for omnichannel interaction.
“These high-level forces are responsible for insurance’s driving influences—new expectations, new innovations, and new competition that individually exert tremendous transformation pressure on the industry,” the study’s authors wrote.
The answer for carriers is to do exactly what they did in 2016; invest in artificial intelligence, the Internet of Things, and other technologies younger customers rely on in order to build deeper relationships. To put it in perspective, 80% of global companies are expected to utilize AI chatbots by 2020, according to research cited in the report. Additionally, the IoT market will easily be worth trillions annually by 2025, the Boston Consultancy Group says.
Though the technology is readily available for the taking, finding the talent to capitalize on it has proven troublesome for insurers. The challenge will grow even more cumbersome, Majesco says, when an estimated 400,000 insurance professionals retire by 2020, according to the U.S. Bureau of Labor Statistics.
“This trend jeopardizes insurers with aging legacy systems and business processes that rely on long-term employees with years of tacit knowledge of their companies,” Majesco says. “[It] may put these insurers at even greater risk of remaining competitive as their competitors and new entrants enter the market with agile, cloud-based “smart” platforms.”
Denise Garth, Majesco’s SVP of strategic marketing, and her colleague Glenn Westlake, manager of market research and content management, co-authored the report.