Being an insurance company simply isn’t the same business as it was years ago. Increasingly, consumers make the rules today as they increasingly turn to the Internet to buy insurance, opening the door for new, more customer-centric competitors to enter the market. What does this mean for insurance companies?
Analysts have predicted that many large insurers will find it difficult to reduce operating expenses to compete against new competition and these large insurers will be slow to respond to shifting market conditions. This is according to a new report from research and analyst group Gartner (News - Alert).
“Consumerization and digitalization are two of the biggest business strategies among insurers in 2012," said Kimberly Harris-Ferrante, vice president and distinguished analyst at Gartner, in a statement.
"Both represent massive change in business processes and technologies. Responding to consumer change and using digital technologies to improve operations are essential in meeting emerging and future market requirements. Embracing both concepts will allow insurers to evolve to better match customers, sales, and regulatory pressures,” she added.
As a result, property and casualty (P&C) and life insurers will face a very different marketplace in the next decade as market conditions bring new rules for competition, according to Gartner. These market shifts will continue as new regulations are introduced, consumers continue to evolve, new competitors enter the market, and new management practices are introduced. It is imperative that insurers can quickly respond to these changes, and do so in a cost-effective manner.
Harris-Ferrante presented her findings at the Gartner Symposium/ITxpo, taking place in Goa, India through Friday, October 12. She said consumers will increasingly adopt mobile technologies, become more social and technology savvy, have shifting requirements for convenience, demand personalized communications, engage in more channels, and express a different view of insurance brands.
Edited by Brooke Neuman