While the next wave of digital technologies will transform the very nature of insurance organizations including what they do and how they do it those that succeed will do so by dramatically transforming their workforces and cultures to operate in a digital world, according to a report from Accenture.
Based on a survey of 450 insurance executives, the Accenture Technology Vision for Insurance 2016 report titled “People First: The Primacy of People in the Age of Digital Insurance” states that the next wave of technology is maturing and expected to ultimately transform the very nature of the insurance organization. 90% of the insurers surveyed said they expect the pace of technology change to increase rapidly or at an unprecedented rate over the next three years.
The report states that the digital trends like intelligent automation, liquid workforce, platform economy, predictable disruption and digital trust offer insurers an opportunity to shift from their traditional business model to one where they can automatically assess and price risk directly, individually and in real-time, as well as help customers avoid losses in the first place.
To take advantage of these technologies and harness these changes for maximum benefit, the report states, insurance executives will need to transform their workforce and culture by putting people first. To that end, the report identifies four key pillars needed for implementing a successful digital culture that does just that. The four pillars are:
- Built for Change
Digital insurers are developing news skills, processes, products and ways of working. They are shifting toward a workforce that is flexible and able to keep up with the rapid pace of change, which requires evolving skillsets. Nine out of 10 respondents (90%) believe that training their workforce has become more important today than it was three years ago and more than three-quarters (78%) believe a more fluid or ‘liquid workforce’ will improve innovation by introducing more diverse thinking and individuals to the process. Liquid workforce means that people will need to re-train in order to stay relevant in the midst of the digital revolution. A liquid workforce is one that is able to rapidly adapt and change based on the environment that they are in.
- Data Driven
Emerging technologies are making it possible for insurers to use data to form a stronger foundation for decision-making at every level of the insurance company. Leading insurers will enable machines to harvest and act on intelligence. Most insurers (86%) believe that using ‘intelligent automation’ driven by artificial intelligence will give them a significant competitive advantage by enabling them to innovate and create new business processes. In fact, 82% of insurers said that automation driven by artificial intelligence will be seamlessly embedded into every aspect of the business in the next five years.
- Embrace Disruption
Insurers need to embrace disruption and adopt technologies that will enable them to do things differently and not like a traditional insurer. Insurers will use technology to gain a deeper understanding of the emerging needs of their customers, partners and employees and platform-driven ecosystems can help inform this understanding. In fact, the vast majority (94%) of insurers believe that adopting a platform-based business model and engaging in ecosystems of digital partners is critical to their success and 83% believe these business models will become part of their organization’s core growth strategy within three years.
- Digitally Risk-Aware
The move towards digital has created many new risks for insurers, including new security threats, demand for transparent use of sensitive data and questions around ethical use of new technologies. In fact, more than three-quarters (78%) of insurers believe that they are exposed to more risk than they are equipped to handle as a digital business. ‘Digital trust’ will need to be considered and integrated into the development process for everything they do moving forward.
In a press release, John Cusano, senior managing director of Accenture’s global insurance practice said, “It is not about using more technology but on enabling people – consumers, workers and ecosystem partners to accomplish more with technology. It is about changing the corporate culture to see technology as a means to help people adapt and learn, create new solutions, drive change and disrupt the status quo. Whatever their role, all of an insurer’s employees need to expect change, understand its impact and keep pace by evolving and adding to their skills.”