Last year, in the wake of the first impact of the coronavirus, insurance companies had to compress multi-year timelines for technological advancement into mere months to ensure continued business operations and customer service.
That experience has made its mark on industry leaders, according to a new study of life insurance executives conducted jointly by LIMRA and Boston Consulting Group.
Polling more than 400 C-suite life insurance executives across 50 countries, they found nearly four in 10 citing technology as the greatest internal challenge faced by their company, twice the proportion that emerged in the last edition of the survey conducted in 2019.
When asked what type of technology would be crucial to their companies’ success over the next five years, four out of five respondents identified digital automation (79%) and data science and analytics (78%).
Nearly two thirds cited customer service technologies (64%), while closer to three out of five labelled legacy systems and modernization (62%) as a priority on their tech agenda. Finally, three out of five (60%) saw mitigating cybersecurity threats as a key element of being competitive.
The report also took note of industry leaders’ shifting perspectives on the future of work. Aside from underscoring a need to accommodate remote and hybrid work arrangements, COVID-19 highlighted the need for insurers to evolve to customers’ growing digital preferences for engagement. A full two thirds of executives who participated said embracing digital innovation would be most important to the future of work in the industry, the report said.
“The pandemic exacerbated the existing war for talent in the life insurance space, especially in the digital domain,” BCG Managing Director and Partner Rob Sims said in a statement. “To attract and retain talent, companies will need to make substantial investments in new technology and re-skilling current employees to capitalize on the capacity made available by the automation or elimination of manual processes.”
And while people have gotten used to the plug-and-play nature of many applications and computer accessories, most survey respondents recognized it won’t be so easy when it comes to tech-driven workplace transformation. Insurance industry leaders, the study found, recognized that it would require meaningful changes in how employees are managed, with 60% saying the biggest challenges with respect to change management will be cultural.
“As companies strive to build an increasingly diverse, technology-empowered workforce, leaders will need to balance the best ways to leverage people and technologies to create the greatest efficiencies and engagement,” Sims said.
To help drive growth, the study recommended three courses of action:
- Expanding distribution models;
- Evolving value propositions and products; and
- Taking new approaches to engagement