Life insurers are playing down the need for investing in technology and innovation, and instead will focus on improving customers' experience in 2019, a new report finds.
The 2018-19 Insurance Industry Report compiled by technology services provider TAS found customer experience will drive the transformation agenda for life, general, motor and reinsurance companies the year ahead.
About one quarter of the 50 leaders canvassed said they will measure their success via customer satisfaction and customer-retention metrics. Their next key priorities are improving technology and differentiating products.
Insurers are now listening to customers and aim to meet their demand for researching and comparing products online easily; and recommending and discussing products on social media often via mobile apps.
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They are also attempting to communicate seamlessly with customers across a range of channels such as text, email, web chat, phone and sometimes in-person.
Unlike last year, compliance and risk, and technology do not rank as highly on the investment agenda. Very few insurers are also less focused on global growth or new product investment.
"With the emergence of start-ups and insurtechs targeting various aspects of the insurance industry, we would have expected to see a higher level of investment in this area," the report said.
Subsequently, only a minority of leaders (6%) intend to invest in internal talent and capability.
"As the sector faces increased scrutiny partly owing to the compliance issues identified in the banking Royal Commission, now more than ever, insurers need to be on the front foot in addressing their regulatory requirements. This is one reason investment in technology should be prioritised," it said.
TAS chief executive Shane Baker said the shift from customer service to customer experience means consumers can now do business on their own terms more easily.
Yet, the lack of investment in technology is a challenge leaders will need to face as the way forward will be with innovative technology and collaborative partnerships, he said.