Trends Report

The State Of Digital Transformation In Insurance, 2020

December 19th, 2019

Summary

Digital transformation is a journey, not a destination, but only 32% of insurance firms have internalized this new reality. Improving customer experience is the top digital transformation driver for insurance services decision makers who are involved in their company's digital transformation, but cost reduction is rising in importance. CIOs and CTOs bring technology awareness and high-level visibility to digital insurance transformation, but they must be strong business leaders as well to execute change successfully. IT processes take priority in digital insurance transformation, ahead of customer service or marketing. Insurers devoted 30% of their IT budget to digital transformation in 2019, prompting executives to focus their efforts on cost savings as they seek to demonstrate ROI. Fifty-five percent of insurance companies will invest in software-as-a-service (SaaS) as part of their digital transformation, followed by security and privacy technologies and infrastructure-as-a-service (IaaS). Forty-seven percent of insurance firms are investing in artificial intelligence (AI), machine learning (ML), and cognitive computing as part of their digital transformation, followed by blockchain and internet of things (IoT). Insurance firms worry about technology challenges but will be hit by organizational challenges related to new processes and skills that digital transformation requires.

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