Today’s blistering pace of technology innovation is proving too much for the insurance industry to handle, according to a report released by Accenture.
In its study, “Thriving on Disruption—2016 CSO Survey: Insurance Key Insights”, Accenture interviewed 561 chief strategy officers from 10 industries, including insurance, telecommunications, banking and retail. It found 94% of insurance CSOs believe emerging technologies will continue to impact their business over the next five years. These technologies include: automation, machine learning, artificial intelligence, cloud and big data.
Just 18% of insurers, however, acknowledged they are fully prepared for the change. To be sure, the case is the same for all nine other industries mentioned in the report.
“The pace of innovation right now is at an all-time high,” said John Cusano, senior managing director and global head of insurance at Accenture. “In response, companies can either partner, do nothing or try to modernize themselves. Though, it [self-modernization] will not help them stay competitive.”
The recent surge in new tech is credited to changes in customer expectations and a greater emphasis on cybersecurity, Cusano added. So far, telecommunication companies are adapting best due to industry familiarity.
Within insurance, Accenture sees emerging tech addressed best by P&C personal lines carriers, as they work more directly with customers. Slowly, life insurers are also attempting to leverage new technologies as well, according to Cusano, citing John Hancock’s partnership with Vitality.
“Even before partnering, companies should engage with any number of fintech or insurtech incubators out there and decide if they want venture arms of their own,” he said. “Through partnerships, insurance providers are able to build awareness and become more familiar with innovators.”
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