You don’t need us to tell you that the UK Insurance industry is a 328 year old global leader across the full spectrum of general, composite, specialist, reinsurance and brokering. However, outside of the industry many people are surprised to know it employs over 300,000 people, contributes to over £10 billion (and rising) in tax revenues and handles investments that represent nearly 25% of the country’s net worth. Oh, and at the same time you’re paying out the equivalent of £77 million every day in claims to help consumers and businesses get back on track.
As an industry, you’ve successfully weathered more changing market conditions than probably any other, but our developed world is now changing at a pace that is unprecedented in human history. Spurred on by massive technological advances, consumers and businesses alike are demanding better, faster and easier services from the brands they interact with. And that’s before true digital natives get a majority grip on UK workforce numbers over the coming years.
So taking a good look across the whole industry and the focus of regulatory scrutiny, you need to ask yourself how Insurance stacks up against other industries dealing with exactly the same consumers and businesses in other areas of their (and indeed your own) lives. We all know that many companies in the industry need to play some serious catch up if they are to thrive and not just cling on for survival over the next 5 years. And for those who are ahead of the curve, they know this is only the start.
The illusion that change won’t significantly touch Insurance is in part due to its unique capital intensive business model. But it is also down to the fact that it’s been seen as a low interest category with limited customer touch points for the c.90% of users who don’t make a claim in any given year. Therefore, disruption has been slower than originally estimated, allowing some fingers to go back in ears.
The fact remains though, that insurance as a whole suffers from poor customer perception and even lower levels of trust. None of which is new news. What is new is the sheer amount of investment being used to support the idea that significant change can be made. Right now InsurTech investment focused on disruptive innovation across Insurance is approaching £3.5 billion a year (source: Venture Scanner). Put all these elements together and the question is not if, but when and how major disruption will hit every part of the industry.
The most pertinent question therefore, is just how prepared do you feel?
At NTT DATA Insurance Consulting we have decades of industry experience and close working relationships with global clients and InsurTech start-ups alike. Our practitioners have hands on experience supporting businesses to drive change and deal with new challenges. So talk to us about helping you to build a successful future for your company while the opportunity is still in front of you.