Insurers have named the likes of Google, Amazon and Apple as the companies whose digital strategies they most admire, but are years away from developing their own, according to a global survey by advisory firm EY.
EY surveyed a total of 100 insurance companies in Europe, Asia-Pacific and the Americas on their digital technology plans.
Nearly half (47%) said they had no single, cohesive digital strategy, although 57% said they would have a strategy within the next three years that would be regularly updated and include detailed budgets and forecasts.
EY found that 80% of insurers globally didn’t see themselves as digital leaders, and 81% believed that “they could lose competitive advantage” by failing to go digital.
“Other industries are already providing much higher levels of digital service and this is something consumers are coming to expect as the norm,” said EY partner Andrew Taggart of the Australian region.
“While Australian insurers have made some digital inroads when it comes to motor vehicle insurance, they are still lagging well behind in all other categories and will need to act fast if they want to keep up with consumer expectations.”
Within the Asia-Pacific region, 63% of insurers said legacy technology systems were holding them back from going digital. Other barriers were regulation (44%), the lack of a compelling business case (41%), and the perception of customer and data security issues (40%).
Regional insurers also lagged behind their global counterparts in using social media and mobile tools to interact with customers and agents, with only 30% using mobile apps compared to a global ratio of 61%.
“At a local level, we know that Australians are strong adopters of digital and mobile technology,” Taggart said.
“With mobile and tablet use growing exponentially, in neglecting these channels insurers are essentially turning their back on the future – particularly in a market like Australia which has such a high uptake of mobile use.
“Insurance companies should also be taking social media more seriously, recognising its value as a relatively inexpensive marketing tool and a means to engage with and influence skeptical, digitally-savvy younger consumers.”
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