2021: The year that accelerated digital transformation for good
HVC 2 – September 2021
Digital Transformation
Matthieu Soulas, Consulting Associate Director, RNA Analytics
The global digital transformation that was already well underway before the coronavirus pandemic took hold gave some businesses’ programmes a turbo boost, and left others vulnerable to disruption.
For some insurers, the sudden arrival of the digital-first world provided them with unexpected visibility of their digital capabilities, cementing the new approaches for the more technology-literate entities. Carriers that already had digital solutions and cloud-based systems in place naturally found themselves at an early advantage during the series of lockdowns that would follow.
At the other end of the scale, those with fewer IT resources have in some cases experienced serious issues, resulting in further delay to programmes and projects, as they focused simply on keeping staff connected, and customers served.
Whilst the pandemic has weakened economic growth and development, it has also underlined the importance and demand for insurance. In business, the spotlight has been firmly on cyber insurance; elsewhere, the health crisis has brought home the need for life insurance.
Accenture forecasts that the global insurance industry will grow by $1.4 trillion between 2020 and 2025, despite current recessionary conditions and disrupted risk models. Carriers have an opportunity to unlock this world of possibilities, to capture a share of this growth and to defend their place in the insurance value chain – and digital transformation is the key.
In Technology Vision for Insurance 2021, published in July 2021, Accenture identifies five trends among leading insurers that are radically rethinking their digital strategies. These insurers:
• stack strategically to architect a better future
• realise the power of digital twins
• democratize technology by putting powerful capabilities into the hands of people.
• turn remote working to their advantage
• collaborate through ecosystems and multiparty systems
Whilst lockdowns are being lifted across the globe, the pandemic is still far from over, and when it is, its impacts will be felt for quite some time to come. Those companies that double down on digital transformation now will be better positioned to weather these impacts and, indeed, to thrive for years to come.
As the World Economic Forum points out in its Strategic Intelligence report, The Digital Transformation of Business, soon, just about every company will need to think like a technology company - or else risk extinction. Companies collectively spent an estimated $1.2 trillion on transformation efforts in 2019, according to IDC, and yet an MIT found that only 13% of business leaders believe their organisations are truly equipped to compete in the digital age.
The WEF points out that the most successful efforts approach digital transformation as a fundamental tool to create new value, rather than simply as a cost cutting exercise.
It refers to this as a “digital at the core” mindset – one that will require larger companies to access the digital skills necessary to a tech-first approach, and to keep pace with change in the field, to ensure they have the right – and flexible – IT infrastructure to improve operational efficiencies and accelerate the growth of the business.
Accenture’s Insurance Revenue Landscape 2025: Innovate for Resilience forecasts that between 2020 and 2025, about $200 billion in revenue opportunity will come from new risks, products and services.
Insurers are operating in an exciting new world and revenue landscape – one in which digital leadership is critical. The pandemic presented insurers with both perils and possibilities. They now have a once in a lifetime opportunity to reimagine both.
To learn more about the possibilities that digital transformation and its consequent processes can unlock for your business, download out latest whitepaper, ‘2021 - Market in Summary’ for free, here: www.rnaanalytics.com/downloads