Sensor technology & Co.
PwC Switzerland has developed five theses: First, clients want tailored packages because, second, their needs are changing with social change. Third, partnerships with insurtech companies and fourth, investments in digital talent are key to success. Fifth, according to the study leaders, automation ultimately makes it easier to adapt to new regulations.
Vowadays, insurance companies are facing major challenges as a result of various developments: Insurtech companies (technology companies with a focus on the financial sector) serve their customers via digital channels and avoid the expensive establishment of a sales force.
Historically low interest rates, a variety of legislative reforms and changing customer expectations, for example in terms of data security, are putting additional pressure on insurance companies. As a result, many insurance companies have announced cost-cutting measures. They are investing in new customer- and service-oriented business models.
PwC Switzerland has drawn up five theses on the future of insurers.
1. omnipresent service
Today's customers expect insurers to offer tailored products that meet their individual needs. This also means that insurers must be accessible through multiple channels - online, mobile, in person. Thanks to the analysis of customer data, insurers can offer services that are precisely tailored to their needs.
2. technical optimizations
Sensor technology, the sharing economy, higher life expectancies and data protection are leading to changing customer needs, which in turn is opening up new areas of business for insurers.
3. partnerships
Instead of competing with insurtech companies, traditional insurance providers should partner with them to dynamically adapt to customer needs and bring new products to market at short notice.
4. develop talents
The transformation to Insurer 4.0 can be accelerated by investing in digital talent. "In order to build a digital business model, some insurers need to change their corporate culture," says Patrick Mäder, Head of Financial Services Consulting at PwC Switzerland.
5. regulate automatically
"In order to efficiently implement the increasing regulatory requirements, insurers must aim for a high degree of automation in their processes," states Robert Borja, Head of Risk Assurance Insurance at PwC Switzerland. "This way, with a sophisticated data architecture and central data availability, they can easily and efficiently create the necessary reports for the regulator."
Conclusion:
Currently and in the coming years, the insurance industry is facing a variety of reforms in supervisory law (Solvency II) and in accounting (IFRS 4 Phase 2, IFRS 9). In addition, there are numerous legal innovations, for example the new Insurance Distribution Directive (IDD), the transparency of investments in (life) insurance products (Money Laundering Act and exchange of tax-relevant data with foreign countries: FATCA, CRS/AIA) or the EU's new "General Data Protection Regulation".
The supervisory authorities are likely to become more demanding in the future as well, triggering extensive additional work and corresponding costs for insurers. In order to comply with the new regulations, insurers must adapt their business model and product portfolio. They will only succeed if they establish a consistent and efficient information system and embed it in an agile organisational structure.
