Ireland’s troubled insurance industry has been urged to embrace digital transformation and use data insights to better serve customers and come up with fairer prices.
Ireland’s insurance industry is in the headlines for all the wrong reasons. Motor insurance price hikes, supposedly driven by mounting legal costs, are frustrating consumers and a more intelligent way of doing business is being urged.
A new study by PwC assessing the digital transformation of the insurance industry found that 69pc of senior executives and decision-makers in the insurance sector are concerned about business growth for the year ahead.
‘The new generation of analytics can not only enable the business to anticipate what will happen, but also shape outcomes such as reduced accident rates or improved health and well-being as well as achieving realistic pricing models’
– PARAIC JOYCE
International competitiveness is being cited as a priority for the industry, as well as the opportunity to make Ireland an international hub for insurance.
To make this happen, operational efficiency (58pc) is being cited as a top priority along with digital trust (55pc).
Over half (52pc) of senior insurance executives surveyed by PwC said an increased level of cybersecurity breaches is a key trend, impacting the sector in the next 2-5 years.
Almost half (48pc) said the increased role of predictive modelling and big data is another key trend for the future.
“Given the industry’s scale, it is hardwired into the local economy but must engage in and be alert to international trends from regulation to innovation,” said Kevin Thompson, CEO of Insurance Ireland.
“This survey shows that while there are significant challenges facing the industry, there are also opportunities, and Irish insurance CEOs are availing of new technologies in order to grow their businesses and enhance their customer offerings.”
Room for improvement in digital transformation of insurance
According to the survey, the majority of Irish insurance CEOs recognise the opportunities created by digital technologies, but there is room for improvement.
While the majority expect digital technologies to drive innovation (61pc), improve operational efficiencies (58pc) and build digital trust (55pc), only one in five (22pc) see digital technologies making a difference where strategic decision-making and retaining talent are concerned.
The survey notes that just over a third (36pc) of the senior management team are high users of data analytics.
The figures tell us that the insurance sector is facing challenges, with over-regulation being the top concern in Ireland (81pc) and internationally (84pc). Other key concerns raised by participating insurance CEOs include low interest rates (63pc) and uncertainties from a potential Brexit (34pc). The availability of key talent (44pc) is also a worry, though less so compared to global counterparts (70pc).
“Fully embedding digital and data analytics right across the organisation is critical,” said Paraic Joyce, PwC insurance partner.
“The new generation of analytics can not only enable the business to anticipate what will happen, but also shape outcomes, such as reduced accident rates or improved health and well-being, as well as achieving realistic pricing models. The availability of key talent is noted as an area of concern.
“In the upcoming Budget, we would welcome any measures that further incentivise foreign talent to come to Ireland.”