Insurers to accelerate insurtech investments: Deloitte
Insurers will allocate more resources to investing in and acquiring insurtechs next year, forced by digitalisation’s impact on the industry, according to Deloitte.
Almost half of all recently surveyed global insurers plan to acquire new technologies over the next three years, including 14% who expect to make more than one acquisition, it says.
“One potential merger and acquisition growth area is being spurred by digitalisation, with insurers seeking to enhance distribution, customer experience, data collection, advanced analytics and operational efficiency by homing in on insurtech… targets.”
Robotics and artificial intelligence should be high on insurers’ agenda over the next year to 18 months, it says. Such technologies are already changing the way the industry operates, providing more computing power and reducing data storage costs.
Many industry players have started using advanced automation such as bots and machine learning algorithms.
“These options give insurers an opportunity not just to reduce expenses, but also to possibly reinvent how they conduct business,” Deloitte says.
“As insurers continue to be challenged by rapidly evolving customer needs and expectations amid heightened competition, many have resorted to belt-tightening and ‘doing more with less’ to shore up returns.”
Insurers must be ready for the many challenges that lie ahead, including those beyond their control such as natural catastrophes and global economic conditions, Deloitte warns.
“In short, insurers can take advantage of growth opportunities, operational improvement and expense reduction [next year] if they can overcome a host of internal and external obstacles standing in their way.”