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IoT and Increasing Digital Demand Signals Major Insurance Industry Disruption

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It’s hard to believe that it has been almost 10 years since I started working on building out the structure of our inaugural World Insurance Report.  

I was living in the Bastille area of Paris and our office was over in the 16th, conveniently situated between the Arc de Triumph and the Eiffel Tower.

We had many lively discussions with my team and our global insurance network working out what angle we thought could address some white space in what had historically been a pretty slow moving, conservative insurance industry.  We eventually landed on investigating some of the gaps around the customer, the insurer, and distributors.  I won’t bore you with these now almost 10 year-old results, but they generally centered around better leveraging data, personalizing the experience, and leveraging digital as an enabler.  Customers were becoming more price sensitive and distributors overwhelmingly saw Internet as their biggest threat.

We have certainly seen insurance evolve over the past decade, but the industry faces some of the same challenges as it did a decade ago.  However, that pace of change is accelerating.  Our World Insurance Report 2016, released today by Capgemini and Efma, takes a look at how the Internet of Things and increasing digital demand may be signaling major disruption on the horizon for the insurance industry.

We surveyed over 15,500 insurance customers and interviewed over 180 senior insurance executives across 30 countries.  Our analysis found three overarching trends:

1. Gen Y customer behavior is foretelling the future for insurers.  With twice as many interactions and heavy digital channel usage, Gen Y has the lowest positive experience levels.

2. The inevitable advance of Connected Technologies/Internet of Things (IoT) will impact how insurers connect with customers and drive transformation. Affluent customers show the highest propensity to adopt Connected Technologies.

3. Connected Technologies/IoT will require insurers to change how they fundamentally assess and manage risk. Risk is decreasing, increasingly transparent, and more likely to be shared.

You can explore more findings and download the full report. You can also join in on the discussion using #WIR16 on Twitter.  Over the coming weeks, I’ll dive deeper into each of these areas and share more insights with a series of Posts.

If you have any questions or thoughts about our findings, please let me know.

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