Insurers prioritize speed and agility for product innovation, customer experience: survey

About one-third of 200 recently polled insurance executives in the United States report that rising consumer expectations are their primary driver for new product development, notes new survey results from SAP SE.

In all, 34% of respondents indicated that rising consumer expectations are their primary driver for new product development, followed by changing regulatory demands (22%) and availability of new technologies (20%), notes a statement issued Monday by SAP.

Findings are based on a survey sample that included 200 insurance executives in both life and health and property and casualty who attended the Insurance Accounting and Systems Association annual conference this past June.

The growing base of millennials, insurers agree, has heightened expectations for their carriers. Convenience was cited by 55% of respondents as millennials’ top priority when seeking insurance products, while low cost was noted by 22%, relationships with their agents by 16%, and brand recognition by 8%.

To reach millennials, 52% of respondents noted that their primary strategy has focused on investing in online, mobile and social technologies to reach customers across channels. Some insurers are going further, with 21% of those polled indicating they are tailoring products to suit millennials’ unique needs and 12% investing in data analytics to segment and target communications.

SAP reports that insurers are also looking to inject agility and speed throughout their processes by updating back-end infrastructure.

“To be innovative in its products and the way it serves agents/brokers and customers to meet these demands, carriers are investing in industrializing the back-end with integrated, agile infrastructure while innovating across these systems,” Ross Orrett, global head of insurance industry innovation and development for SAP, says in the statement.

In all, 51% of insurer respondents reported that their organizations have adopted cloud computing in some capacity. “Cloud computing has matured and we’re seeing insurers shift from leveraging the cloud for just back-office functions to implementing cloud across the entire organization,” Orrett reports.

Almost half of the respondents who noted their organization has adopted cloud computing in some capacity have implemented cloud-based systems for back-office functions (anecdotally citing such functions as HR, accounting and procurement).

Others, however, have adopted cloud for mission-critical functions like policy administration (18%), product development (7%), claims processing (6%) and risk management (6%).

That said, respondents did point to barriers to cloud adoption. For example, 34% cited security concerns as the primary challenge for adopting cloud computing in their organizations, lack of internal buy-in was noted by 28%, budget and financial concerns by 13%, unstable technological infrastructure by 13%, and lack of time by 12%.