The biennial international "Insurance Banana Skins survey - an initiative of the Centre for the Study of Financial Innovation (CSFI) and PwC - shows 21 potential "banana skins" this year, with cyber risk, change management and technology as top three risks for the insurance industry. "Three crucial aspects that insurers should deal with," believes Matthijs Kortenhorst, who is responsible within PwC for the advisory practice that focuses on the transformation of insurers and pension service providers into future proof organizations." To remain relevant, insurers must move towards a much more open, technology-driven and platform-like structure."
According to Kortenhorst, the transformation is driven by two current developments in the insurance world. "First of all, insurers must ensure that they continue to offer their customers relevant experiences. Platform companies such as Apple, Google and Spotify have radically changed people's expectations of service providers. The experiences that such parties offer are characterized by a much more direct, more digital and, above all, more cool interaction."
In addition, insurers have more and more interesting technological possibilities at their disposal - whether or not in collaboration with healthcare providers, car manufacturers, OEM’s or other parties - to, for example, reduce the number of claims or nudge customer behaviour. "This way, insurers get to the centre of an ecosystem to which also their customers and partners should have access", thus Kortenhorst’s explanation of this development. "This requires a very open and, at the same time, extremely safe digital architecture. Because everything is still in old systems and mainframes nowadays, opening up to new structures is of course a huge challenge. Also, you will have to deal with the complete top three potential "banana skins". The greatest danger is and remains that you, as an organization, do not or insufficiently adapt to the times. Then you will lose the game anyway."
An extremely accessible and digital front office. That eminently sounds like something that insurtechs would want to use and may even succeed to disrupt the insurance industry with. "Generally it is," says Kortenhorst, "but this business seems a bit too complex to easily disrupt. It is a technical and complex product, regulations and supervision are strict. Besides, scale is of great importance. Certainly, there are successful insurtech initiatives such as Lemonade, a scale-up that is internationally particularly successful. More and more often we also see that insurtechs are taken over fairly quickly by established parties or that cooperation with existing insurers is set up early. However, insurers themselves will also have to fully transform to better cope with the rapid changes. That touches on fundamental questions such as: Who do you want to be? What will your products look like in the future? Who should you work with? Which operating model does this include? And how do you do this in a way that is safe and meets all privacy requirements? We can assist them well throughout that transformation process. We call it Front Office Transformation, but it naturally affects the full breadth and depth of an organization. In a positive way. The sector feels the urgency, the opportunities are seen and there is a lot of positive energy. The insurance world is entering a very interesting period."
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