insurance in a digital world: the time is · pdf file2 insurance in a digital world: the time...

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


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


Section 01

of key themes

7


1

79%

say they are “not setting the baseline” for digital or are “still learning.”

01

of key themes


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


57%

have operating models that do not facilitate digital.

Most respondents say their digital

Over

89%don’t consider past interactions when recommending products or services to online customers.

2


Exhibit 2: Current and planned future spend on digital development

Expected increase in digital spend*

*Excluding “Don’t 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%

<5% 5%-10% 10%-25% 25%-50% 50%+

<5% 5%-10% 10%-25% 25%-50% 50%+

Americas


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


13


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


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


4 It’s 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


Retail chain stocks up on digital


AirAsia’s 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


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


Supporting agents’ digital strategies

6 Analytics are critical to

Discovery Life leverages wealth of consumer data


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%


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


How should insurers respond? Section 02

How should insurers respond?

27


Step 1:

02




29



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



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



and innovation

Mutual innovation for NewCo customers



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



34


How EY assists clients’ digital business developmentSection 03

How EY assists clients’ digital business development

35


03


Credential

Digital operating model

Credential

Innovation Center



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 managemen

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.



Credential

Digital governance

Credential

Digital analytics strategy and roadmap



Strategy

Technology and

Analytics

Understanding the

Distribution

Culture

Mobile



40


Conclusion



42


Section 04

regional highlights

43


around the barriers to digital progress and future investment than their global peers. One reason may be that the region’s 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


Only 7%

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


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


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


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.


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.


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%


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


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


Additional reading from EY



55


Shona Burns

Christine Delany

May Knight and Russel Lok

Contacts


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About EY

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