Insurance Industry Must Adopt Tech-Centric Biz Model To Survive 2013: Ovum

Continued economic pressure will force the insurance industry to take a more innovative approach to the role technology plays in their decision-making and operations, according to a new report from Ovum. A focus on mobile solutions, advanced analytics, and near-real-time systems will be key.

A familiar litany of economic issues will persist in 2013 as existed in 2012: struggles with keeping the eurozone whole, protests in the streets, volatile financial markets, high rates of unemployment, and low rates of growth in the developed world all combining to make the 2013 economy a difficult environment in which to generate profitable growth.

Technology will play a central role in helping to combat falling revenues, with insurers focusing on strengthening channel management and making better decisions through analytics. It will be essential for insurers to optimise their core administration systems and make use of advanced analytics in order to remain competitive in the modern insurance market. Remaining in regulatory compliance will also become more of a pressing issue as deadlines for key regulations draw nearer.

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“There is no hiding that 2013 will be another tough year for the insurance sector,” commented Barry Rabkin, Principal Analyst, Insurance Technology at Ovum. “The insurance demands of the growing middle class in the emerging economies and the continued economic growth in the Asia-Pacific region provide the only positive news for insurers as we approach 2013. A perfect storm of global events, the western recession, and incoming regulation means the industry must now adopt a technology-centric business model if they are to survive the coming years.”