July 14, 2014
/PRNewswire/ --Insurers are seeking speed and agility throughout their infrastructure for innovative product development and an enhanced customer experience, reveals a survey by
(NYSE: SAP). The survey of 200 insurance executives at the IASA Annual Conference held in June found a number of factors motivating insurers' innovation strategies. Thirty-four percent of respondents indicated that rising consumer expectations are their primary driver for new product development, followed by changing regulatory demands (22 percent) and availability of new technologies (20 percent).
Insurers are in agreement that the growing customer base of millennials — generally considered those born between the early 1980s to the late 1990s — has heightened expectations for their carriers. Fifty-five percent of respondents cited convenience as millennials' top priority when seeking insurance products, with low cost (22 percent) and relationships with their agent (16 percent) followed by brand recognition (8 percent).
This has forced many insurers to consider a more adaptable product strategy. More than half (52 percent) of respondents noted that their primary strategy to reach millennials has focused on investing in online, mobile and social technologies to reach customers across channels. Twenty-one percent indicated they are tailoring products to suit millennials' unique needs and 12 percent are investing in data analytics to segment and target communications.
Yet while insurers remain focused on the customer experience, updating their back-end infrastructure continues to be a priority as they seek to inject agility and speed throughout their processes. Fifty-one percent of respondents indicated their organization has adopted cloud computing in some capacity. While nearly half of these respondents have implemented cloud-based systems for back-office functions — anecdotally citing HR, accounting and procurement — others have adopted cloud for mission-critical functions like policy administration (18 percent), product development (seven percent), claims processing (six percent) and risk management (six percent).