Digital trends and insurance challenges—how digital capability can help insurers adapt

Insurers face challenges in three key areas: people, compliance and profit.

People

100% of CFOs at the recent Insurance Ireland PwC CFO Forum agreed that finding talent is a key challenge. Identifying the right people with the right skillset is vital in this context, with a recent survey from MIT Centre for Information Systems Research (CISR) showing that just 12% of top team members in the finance and insurance industry are “digitally savvy”. Attracting diverse talent and developing and nurturing their skillsets in-house will drive digital capability for insurers. Digital native employees want technology that ‘just works’, like their phone. Even if traditional insurers don’t think they need to change their processes or culture, they’ll want to if they want to attract the best talent.

Compliance

Our clients are well underway with their IFRS17 journey. However, new environmental, social and governance (ESG) requirements will drive new reporting needs. Often, traditional finance and reporting systems are not capable of delivering these new reports. Insurers will therefore need to consider updating their systems while ensuring that their data is high-quality.

Profit

The stock market decline has affected the profitability of the insurance industry. In addition, the impacts of climate change have caused some insurers to withdraw from certain markets. They also find themselves absorbing costs for city centre offices that are less relevant in a remote working world. Enterprise performance management (EPM) is a key tool for analysing costs and revenue. However, PwC’s EPM benchmarks show that over 50% of respondents are dissatisfied with their performance management maturity. Improving your performance management capability is a key first step in improving your performance and profit. PwC’s EPM Navigator can quickly assess your current state and help you get started.

The three key actions businesses can take now

Our 25th Annual Global CEO Survey showed that the majority of businesses are now investing in digital technology to create a competitive advantage, or refocusing their entire business strategy on digital technologies. As a result, the need to accelerate digitisation has never been greater for insurers.

Here are three ways to kick-start your digital transformation journey:

1. Assess your current capability
   Understanding performance management capability is a first step in improving performance. The PwC EPM Navigator can help you understand your current maturity in minutes.
2. Develop your digital skills
   Training your staff in digital skills will not only help your organisation adapt in a digital world, it will also increase staff satisfaction and retention.
3. Get the right tools
   Leading insurers use the right technology to get the job done—whether that is a modern enterprise resource planning (ERP) system, automation or analytics. By using such tools, you can save time and increase profits.

We are here to help you

Customers’ evolving digital behaviours, coupled with external pressures, will continue to cause disruption for the insurance industry in the months and years ahead. An increased focus on digital transformation will help insurers mitigate these concerns, and our experienced team is ready to help you as you navigate this journey. Contact us today.