The trend: Insurance technology spending in the US and the UK is expected to grow by more than 25% between 2022 and 2026. Insurers will use that tech spending to digitize their core capabilities, build out more digital self-servicing tools, and create personalized products and experiences for customers.
Our report, The Insurance Heads of Digital, highlights why insurers see digital transformation as key to their future and discusses some of the important topics that the heads of digital at insurance firms say are at the top of their minds.
Why is digital important? The insurance sector has lagged behind most other sectors in its digital transformation. Why? Insurers fear failing at a time when the stakes behind attracting customers are high. Their legacy systems present technological barriers, and formulating a successful execution plan is challenging. But digital transformation is vital for insurers’ success.
Digital heads of insurance companies are getting increased support from CEOs and leadership, as newer leaders are more likely to value technology and see the value of digitization. The emphasis on technical development is putting digital heads in strategic positions at insurance companies and enhancing their ability to influence other leaders across the organization.
Change is coming: Updating and modernizing technology is opening up opportunities for digital heads to build and scale digital processes into core capabilities. But they still have some challenges in budgeting. US insurers' tech budgets are split 65%/35% between maintaining the business and changing it, per 2021 Forrester Research data. But digital heads are still finding ways to prevail.
What are digital heads thinking about?
Balancing the modernization of core capabilities and developing new emerging opportunities
Cementing digital as a core business strategy
Attracting, retaining, and upskilling talent
Give customers what they want: Customer touchpoints with insurers are few and far between, usually only amounting to the point of sale and filing a claim. Insurers must put engagement at the forefront of their digital transformation and optimize the customer’s journey.
Continue reading: To learn more about what the heads of digital can do internally to execute on a successful digital transformation, click here.
This article originally appeared in Insider Intelligence’s Banking Innovation Briefing—a daily recap of top stories reshaping the banking industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.