Digital transformation will change insurance models

The insurance industry will not remain immune to the process of digital transformation, according to a new report by SAP SE and Ovum.

According to the report, entitled “Technology Transformation in the Global Insurance Industry”, insurance businesses will need to take a proactive approach if they want to remain competitive. This means offering technology-enabled ‘as-a-service’ types of solutions.

The two companies said that there are three key elements driving the future of the insurance business, and those are Internet of things (IoT), digital transformation and the cloud. Through digital transformation, insurance businesses can capture huge volumes of data and use it to better predict risky situations. That way, they can better advise their clients.

The cloud, on the other hand, will help insurers as they’ll be able to offer better, faster and more reliable services. And finally, the Internet of things will see insurers embedding sensors, telematics and home automation to allow policyholders to create their own, customised policies.

The report says that this kind of transformation is expected within the next five to 10 years.

“To fully exploit the opportunities presented by these technologies, carriers need to view them as core parts of their business strategy,” added Charles Juniper, principal insurance analyst, financial services technology, Ovum Research.

“Digital transformation, cloud and IoT all play an important role in creating a seamless experience that provides added value to customers. It’s this added value that will make insurance carriers a more active, valuable participant in their customers’ lives and help them to compete against new market entrants.”

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