Ernst & Young Urges Insurers to Digitizing Core Processes, Embrace Flexible Sourcing Models

 

Abiodun

Ernst & Young Global Limited has called on insurers to continue to address their

technology by digitizing core processes, migrating to the cloud and embracing flexible sourcing models to remain in business.

In its 2022 Global Insurance Outlook, which highlights trends shaping the Insurance Industry, Ernst & Young said after the dramatic developments of the last few years, insurers have shown they can undertake large-scale change at a faster pace than many industry veterans thought possible and can deal with unexpected developments.

“The current landscape is also notable for its fragmentation; convergence and intense competition, including from a mix of non-traditional players; and widespread collaboration. Carriers will look to partner with or acquire the most promising InsurTechs, and banks and asset managers will offer more protection products and seek to differentiate on holistic financial wellness value propositions, forcing insurers to choose between collaboration and competition, “it said.

The report also stated that the insurance industry must seek to lead with purpose and live up to its highest aspirations, “particularly in the wake of the COVID-19 pandemic. Insurers had to be there for customers and undertook large-scale change quickly to make sure they could serve people in need – and they must continue to do so, particularly if they are to help the world prepare for increasing climate risk.”
For Rotimi Okpaise, EY Insurance Leader for West Africa, “our Global Market report aligns with expectations in West Africa. Ecosystems (Banks, Telecoms, Insuretecs) are gradually developing in our region, aimed at expanding the Insurance customer base and increase our low insurance penetration levels. Efforts are being made to engage customers better, know their needs, segment the customer base and, develop, market, and sell affordable relevant products and in the process, increase the sectors Revenue base. There are data-sharing regulatory hurdles to scale, but these are broadly deemed surmountable.”

On COVID-19 and its multi-faceted disruptions, Okpaise said: “The Covid 19 triggered new Workforce needs. The Industry adapted reasonably well through investing in technology and adjusting terms of employment. Needs are however continuously changing and the dearth of skills across many industries has led to a war-on-talent and more flexible employment terms.”

The Report further noted that the rise of open finance, along with the ecosystems of financial solutions that it enables, has emerged as one of the defining financial services trends of the 2020s, primarily in response to changing customer needs and expectations.
On the promise of a human-centered, tech-enabled enterprise, it stated, “Not that long ago, the conventional wisdom in insurance held that workers would lose their jobs as insurers adopted more technology and automated more processes.”

Climate change and sustainability, the report stated, have re-emerged atop board and C-suite agendas as the direct impacts of the COVID-19 pandemic have receded. Previous discussions about sustainability were largely theoretical and centered on making public pledges of support.