Insurance in a Digital World: The Time Is No ?? 2 Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013 Insurance in a digital world: the time is now Contents

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  • Insurance in a digital world: the time is nowEY Global Insurance Digital Survey 2013

  • 2 Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013

    Insurance in a digital world: the time is now

    Contents

    Executive summary 4

    01 802 28 03 36

    41

    04 44

    56

    Voice of the customer: time for insurers to rethink their relationships The journey toward greater customer centricity

    distribution channel

    Overview

  • 1Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013

    Introduction

    Insurance in a digital world: the time is now

  • 2 EY Global Insurance Digital Survey 2013

    EY Global Insurance Digital Survey

    Research approach and methodology

    Scope

    EuropeMiddle East

    Target countries

    UKSpainFrance

    USCanadaMexicoChile

    AustraliaHong KongThailandSingaporeMalaysiaIndonesiaJapanSouth KoreaIndia

    South Africa

    Other countries

    GermanyIrelandItalyNetherlandsPolandTurkey

    ArgentinaBrazilColombiaUruguay

    ChinaTaiwanVietnamPhilippinesBangladesh

    KenyaNamibiaNigeriaUAE

  • 3

  • 4 EY Global Insurance Digital Survey 2013

    Executive summary

    1

    2

    3

  • 5EY Global Insurance Digital Survey 2013

    Executive summary

    4

    5

    6

    7

  • EY Global Insurance Digital Survey 2013

    Executive summary

    6

  • EY Global Insurance Digital Survey 2013

    Section 01

    of key themes

    7

  • 8 Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013

    1

    79% say they are not setting the baseline for digital or are still learning.

    01

    of key themes

  • 9Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013

    Digital strategy and leadership

    Do you see your organization as a digital leader in your industry?

    Do you have a business case for digital and is your investment integrated into the financial planning of the company?

    Do you have a clear, well-executed implementation plan for your digital strategy?

    Do you have the right operating model in place to deliver and run digital capabilities?

    Has your digital strategy got support from senior management? Do they lead by example?

    Customer experience

    How does digital inform and support segmentation?

    How do you use digital channels to attract prospective customers?

    How do you manage and build brand loyalty through digital channels?

    How do you reduce your cost to serve using digital channels?

    How does digital support your Customer Value Management? (Including cross-sell, up-sell and retention efforts)

    All average scores on scale 1-5

    1 2 3 4 5

    1 2 3 4 5

    Exhibit 1: Current and target future state levels of digital maturity

    Global current Global life current Global non-life current

    Global target future Global life target future Global non-life target future

  • 10 Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013

    57% have operating models that do not facilitate digital.

    Most respondents say their digital

    Over

    89%dont consider past interactions when recommending products or services to online customers.

    2

  • 11Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013

    Exhibit 2: Current and planned future spend on digital development

    Expected increase in digital spend*

    *Excluding Dont knows

    18% 38% 23% 8% 15%

    9% 17% 36% 21% 16%

    7% 8% 22% 39% 24%

    Global

    Current spend on digital*

    68% 23% 8% 0%

    0%-10% 10%-20% 20%-30% 30%+

    0%-10% 10%-20% 20%-30% 30%+

    Global

    69% 28% 4% 0%Global life

    79% 11% 10% 0%Global non-life

    84% 9% 7% 0%Europe

    52% 43% 5% 0%Asia-Pacific

    61% 30% 10% 0%Americas

    Over 1 year

    Over 3 years

    Over 5 years

    Over 1 year

    Over 3 years

    Over 5 years

    Over 1 year

    Over 3 years

    Over 5 years

    Over 1 year

    Over 3 years

    Over 5 years

    28% 46% 0% 0% 27%

    5% 29% 29% 9% 27%

    5% 8% 17% 33% 37%

    Europe

    2% 34% 55% 2% 7%

    0% 2% 55% 34% 9%

    0% 2% 26% 60% 12%

    Asia-Pacific

    21% 31% 19% 19% 10%

    19% 14% 31% 27% 10%

    10% 11% 22% 36% 21%

  • 12 EY Global Insurance Digital Survey 2013

    67% implement digital as part of business-as- usual activity.

    68% believe they have delivered some easy quick wins but not made transformational progress.

    3

  • EY Global Insurance Digital Survey 2013

    13

  • 14 Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013

    68% of life companies say internal company structure or culture constraints is the key challenge they face in delivering their digital strategy.

    Exhibit 3: Top inhibitors of digital growth in insurance market

    Global Global life Global non-life

    Legacy technology constraints80%75%88%

    64%66%72%

    40%41%45%

    33%34%30%

    32%29%29%

    24%24%17%

    19%23%12%

    Slow pace of delivery by insurers

    Intermediary/agent channel strength or resistance

    Lack of a compelling business case

    Regulatory restrictions/environment impeding digital growth

    Perceived customer/data security issues

    Insufficient consumer demand

  • 15Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013

    Exhibit 4: Key challenges faced by companies in delivering their digital strategy

    Global life Global non-life

    Lack of methodology framework34% 25%

    Developing a clear technology strategy44% 34%

    Lack of skills/difficult to find expertise50% 45%

    Building solutions with flexibility41% 42%

    Channel conflict46% 44%

    Systems issues in implementation65%63%

    Lack of resources (time and budget)47% 43%

    No business case for investment21% 23%

    68% 64%Internal company structure or culture constraints

    61% 50%Integrating digital with other distribution channels

    40% 29%Designing new digital offerings effectively for customers

    63% 68%Creating a culture of rapid innovation and development

    52% 47%Gaining internal management buy-in and investment

    Shown in descending order for Global life sector

  • 16 Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013

    4 Its all about retention through Voice of the customer survey

    Exhibit 5: Drivers of companies digital strategy

    Enriching the customer experience32%

    Global (life and non-life)

    Regaining more direct control of the customer relationship

    20%

    Attracting prospective customers and increasing sales

    Increasing internal efficiencies

    Other5%

    2%

    3%

    5%

    9%

    9%

    14%

    Reducing cost to serve customers and intermediaries

    Managing and building brand

    Competitors are offering it and we want to keep up

    Increasing up-sell and cross-sell

  • 17Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013

    Retail chain stocks up on digital

  • 18 EY Global Insurance Digital Survey 2013

    AirAsias owner takes off in insurance

    6 its

    Only 46% of life companies believe that customers will ultimately leave us if they fail to embrace digital.

    5 Distributors and agents are digital

  • 19

  • 20 Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013

    Exhibit 6: Agents use of digital increase in importance over next three years

    These are not % responses; they are weighted scores based on respondents ranking in order of importance.

    Improve efficiency and quality of interactions with customers

    4.09

    2.68

    Reduce risk and improve controls

    1.49

    0.40

    Increase process efficiencies

    2.64

    2.33

    Collect, pay and reconcile commissions

    1.02

    0.81

    Expose/offer self-service capability to customers

    2.39

    1.36

    Capture quantitative and qualitative customer information

    0.98

    0.53

    Using social media

    0.71

    0.65

    Reporting and tracking sales pipeline, policy setup, etc.

    0.78

    0.91

    Providing education/general advice to market, e.g., blog

    0.52

    0.27

    Delivering or receiving training/knowledge

    0.24

    1.29

    Global life Global non-life

    Shown in descending order for global life sector

  • 21Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013

    Supporting agents digital strategies

    6 Analytics are critical to

    Discovery Life leverages wealth of consumer data

  • 22 Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013

    7

    Exhibit 7: Online vs. mobile digital functionality Online Mobile

    Provide information about our company/products 92%47%

    Provide customer self-service facilities 74%40%

    Provide quote 72%43%

    Transact/purchase online 66%35%

    Educate our customers about brand values 63%30%

    Allow customers to submit complaints 57%21%

    Facilitate online/virtual communication 40%17%Enable customers to submit and process claims online

    39%23%

    Request and process settlement/payment online 39%26%Contribute to product development and market research

    34%15%

    Enable customers to digitally record and document claims

    29%27%

    Provide financial advice 18%9%

  • 23Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013

    Only 43% of insurers provide mobile quotes compared to 72% who provide these online.

    Mobile shopping for time-strapped consumers

    Friendsurance making insurance social again

  • EY Global Insurance Digital Survey 201324

  • 25EY Global Insurance Digital Survey 2013

  • EY Global Insurance Digital Survey 201326

  • EY Global Insurance Digital Survey 2013

    How should insurers respond? Section 02

    How should insurers respond?

    27

  • 28 EY Global Insurance Digital Survey 2013

    Step 1:

    02

    How should insurers respond?

  • EY Global Insurance Digital Survey 2013

    How should insurers respond?

    29

  • 30 Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013

    How should insurers respond?

    Build analytics capabilities in step

    Mobile Banking: Financial Services Meet the Electronic Wallet

    Exhibit 8: The digital virtuous circle non-linear business case

    Data analysis and segmentation capability

    Digital distribution/customer access

    Digital offerings/capabilities

    Increased productivity/reduced cost to serve

    Increased sales

    More relevant tailored offerings

    Better experience = customers more willing to share data

    More customer insight (data)

    Increased customer retention Increased customer

    satisfaction

    Digital service tools/better customer experience

  • 31Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013

    How should insurers respond?

    Social media in insurance how to interact better with your customers,

    organization

    focus on becoming an innovative company

    Step 2:

    The writing is on the wall for Australian insurer Youi

  • 32 Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013

    How should insurers respond?

    and innovation

    Mutual innovation for NewCo customers

  • 33Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013

    How should insurers respond?

    Exhibit 9: Creating a digital culture

    01 Leadership alignmentAlignment of leadership around a compelling story through the use of tools, methods and approaches that will form the DNA of the future ways of work and digital culture (using video, animates and social media)

    02 Cultural alignmentDefining the cultural shifts necessary for the business to achieve its purpose and creating interventions to achieve this alignment

    03 Collaborative workingCreating the physical, online and cognitive (methods, tools, approaches) environments to support the business and embed cultural change

    04 EnablementDelivering the training, education and development opportunities necessary to shift the ways of working, as well as undertake development activity on specific topics pertaining to cultural change, through the use of the collaborative working environments (03) thinking and learning by doing

    05 MomentumEstablishing the performance management systems to reinforce the new ways of working and sustain the collaborative environment

    01 02 03 04 05

  • EY Global Insurance Digital Survey 2013

    How should insurers respond?

    34

  • EY Global Insurance Digital Survey 2013

    How EY assists clients digital business developmentSection 03

    How EY assists clients digital business development

    35

  • 36 Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013

    03

    How EY assists clients digital business development

    Credential

    Digital operating model

    Credential

    Innovation Center

  • 37Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013

    How EY assists clients digital business development

    Exhibit 10: EY Digital Strategy Canvas

    Digital strategy

    VisionMission

    statement

    Corporate strategy

    Financial objectives

    Customer objectives

    Digital initiatives

    Supplier selection

    Road map

    Benefits model

    Prioritization

    Supplier shortlist

    Digital road map

    Digital governance frameworkCustomer-

    driven innovation

    Information& insight

    Partners & ecosystem

    Benefits realization

    Risk & compliance

    Businessprocesses

    Enablingcapabilities

    People & operating

    model

    Technology& tools

    Customer proposition & strategy

    Intentional customer

    experience

    Brand

    Research & insight

    Customer journeys

    Segmentation

    Customer strategy

    Personas

    Visualization

    Program

    Digital ambition

    Program

    manag

    emen

    t

    Our Digital Strategy Canvas is a visual representation of the EY method for digital strategy projects. It represents all the key elements that need to exist and be in alignment to create a robust and implementable digital strategy. The model is not linear; each dial informs and shapes the other as the project progresses.

  • 38 Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013

    How EY assists clients digital business development

    Credential

    Digital governance

    Credential

    Digital analytics strategy and roadmap

  • 39Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013

    How EY assists clients digital business development

    Strategy

    Technology and

    Analytics

    Understanding the

    Distribution

    Culture

    Mobile

  • EY Global Insurance Digital Survey 2013

    How EY assists clients digital business development

    40

  • 41EY Global Insurance Digital Survey 2013

    Conclusion

  • EY Global Insurance Digital Survey 2013

    How EY assists clients digital business development

    42

  • EY Global Insurance Digital Survey 2013

    Section 04

    regional highlights

    43

  • 44 Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013

    around the barriers to digital progress and future investment than their global peers. One reason may be that the regions developing and emerging nations are at an earlier stage in their digital journey. Although Australia aligns more with the digitally developed European and US markets, it is outweighed by the large number of Asian countries included in

    representative of Asia.

    04

    regional highlights

  • 45Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013

    Only 7% of regional respondents see regaining more direct control of the customer relationship as a driver, compared to 20% globally.

  • 46 Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013

    AmericasThe scope of the Americas region in our survey comprises a diverse range of countries. For example, direct insurance and direct to consumer marketing are still only just emerging in Latin America but much more developed in North America. Nonetheless, the region has much in common across many indicators of digital advancement, from budgetary spending, to customer engagement.

    Legacy technology constraints are the top

  • 47Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013

    57%use online customer engagement in product development and market research versus 34% internationally.

  • 48 Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013

    Europe Our results show Europe lagging behind other regions in current capability and immediate investment plans, with insurers rating themselves at the lowest digital maturity level. In many industry sectors

    services, the customer services environment and loyalty management are well-developed. Our discussions with European insurers have

    services to set a benchmark of where they should aim. Insurers may therefore be judging themselves against a higher benchmark than perhaps their peers in other global markets.

  • 49Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013

    Europeans are spending less on digital in

    European insurers perceive

    76% rate themselves as basic in using digital to reduce costs to serve customers, compared with 55% globally.

  • 50 Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013

    Exhibit 11: Top inhibitors of digital growth in the insurance market, by region

    Global

    Americas Europe

    Legacy technology constraints

    Slow pace of delivery by insurers

    Intermediary/agent channel strength or resistance

    Lack of a compelling business case

    Regulatory restrictions/environment impeding digital growth

    Perceived customer/data security issues

    Insufficient consumer demand

    80%63%96%86%

    64%35%76%93%

    40%34%41%48%

    33%41%32%26%

    32%44%20%29%

    24%40%19%7%

    19%33%13%7%

  • 51Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013

    Exhibit 12: Online vs. mobile digital functionality, by region

    Provide quote

    72%43%

    Transact/purchase

    Provide self-service facility

    Online claims

    Global

    83%44%Asia-Pacific

    80%53%Americas

    48%30%Europe

    66%35%Global

    70%41%Asia-Pacific

    76%44%Americas

    48%16%Europe

    74%40%Global

    69%37%Asia-Pacific

    83%50%Americas

    70%34%Europe

    39%23%Global

    45%32%Asia-Pacific

    50%35%Americas

    32%21%Europe

    Online Mobile

  • 52 Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013

    Exhibit 13: Current and target future state levels of digital maturity, by region

    Digital strategy and leadership

    Do you see your organization as a digital leader in your industry?

    Do you have a business case for digital and is your investment integrated into the financial planning of the company?

    Do you have a clear, well-executed implementation plan for your digital strategy?

    Do you have the right operating model in place to deliver and run digital capabilities?

    Has your digital strategy got support from senior management? Do they lead by example?

    Customer experience

    How does digital inform and support segmentation?

    How do you use digital channels to attract prospective customers?

    How do you manage and build brand loyalty through digital channels?

    How do you reduce your cost to serve using digital channels?

    How does digital support your Customer Value Management? (Including cross-sell, up-sell and retention efforts)

    All average scores on scale 1-5

    1 2 3 4 5

    1 2 3 4 5

    Global current Europe current

    Americas current

    Global target future Europe target future

    Americas target future

  • 53Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013

    Additional reading from EY

  • Additional reading from EY

    EY Global Insurance Digital Survey 201354

  • Additional reading from EY

    EY Global Insurance Digital Survey 2013

    55

  • 56 EY Global Insurance Digital Survey 2013

    Shona Burns

    Christine Delany

    May Knight and Russel Lok

    Contacts

  • 57Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013

    Contacts

  • 58 Insurance in a digital world: the time is now EY Global Insurance Digital Survey 2013

    Contacts

    About EY

    ey.com

    EY

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