Insurers ill-prepared for transition to digital
The global insurance industry is trailing other sectors when it comes to transition to the digital world. That’s the finding of a survey by Bain & Company which polled 70 life and P&C insurers and discovered that insurance executives have a lack of confidence in adopting digital technologies. Almost half of the companies surveyed said they don't believe they have an achievable plan, and 60 per cent are missing some key elements for the journey, such as a clear vision or compliance and risk processes. This puts the industry at odds with consumers who are demanding more digital channels for their insurance transactions.
This lag in adopting digital technologies is allowing competitors from outside the industry to muscle in: "Insurers are finding it difficult to simply keep up with the customer's digital demands, much less imagine a digital future for themselves and the industry," said Gunther Schwarz, head of Bain's insurance sector globally and co-author of the report. "As a result, they've left the door open for a new breed of companies – mostly tech start-ups – to chip away at the insurance market."
More than 20 percent of companies surveyed are not on a clear path and, with some of the lowest levels of digitalization, face a significant disadvantage in making a successful digital transition.
"Today's innovations will be tomorrow's standard practices, so there is little time for insurers to waste in stepping up their digital investments. The goal of our research is to help insurance executives understand where to start and how to execute their digital strategies," said Harshveer Singh, leader of Bain's life insurance sector in Asia-Pacific. The full report is at bain.com
Japanese insurers seek US partnerships
Insurance companies in Japan are keen to forge relationships with US counterparts in a bid to push into growing markets. Reuters reports that Japan’s population is declining, leaving domestic insurers with limited scope for growth. Large Japanese firms such as MS&AD and
Sompo Japan Nipponkoa Insurance are also under pressure from increasing incidences and costs of natural disasters so they aim to build profits in growing markets to offset the cost of domestic claims. Reuters believes that there will be more M&A transactions between Japanese and US insurers following the $7.5 billion deal announced last month between
Tokio Marine Holdings and HCC Insurance Holdings.
Canadian storm last month tops $45 billion in insured damage
Insurance Bureau of Canada says that the hail and windstorms that swept across parts of Alberta, Saskatchewan and Manitoba on June 12 caused more than $45 million in insured damage, according to the preliminary estimate by Catastrophe Indices and Quantification Inc. The storm, with gusting 116 kilometres per hour winds and hail of up to 6cm in diameter, brought down trees and power lines and damaged vehicles, homes and commercial buildings. IBC’s Bill Adams commented: "In 2014, weather-related damage in the Prairies alone resulted in more than half a billion dollars in insured losses. The insurance industry continues to speak to all levels of government about the need to continue investing in infrastructure to make communities more resilient to increasingly frequent and severe weather events."
