European insurers, facing challenging macroeconomic conditions, new market risks and changing customer demands, are seeking more agile, tech-savvy approaches to business, according to a new research report by Information Services Group (ISG).
The ISG Provider Lens Insurance Services report for Europe finds insurers are looking to modernize their legacy systems to stem the effects of new competitive pressures and rising costs.
Rather than going it alone, many are turning to service providers that have the required digital IT skills and industry experience to help them transform their business models.
Europe’s insurers face a new world of developing risk and uncertainty due to a number of recent trends. This move is driven by challenging macroeconomic conditions, new market risks, and changing customer demands.
The report emphasizes the need for insurers to adopt more agile and insurtech business approaches.
Providers are aiding insurers in modernizing legacy systems, addressing rising costs and competitive pressures, and enhancing risk-modeling, pricing methods, and product innovation.
Inflation and increasing interest rates are impacting demand, growing regulatory pressure is increasing the cost of doing business, cybersecurity and climate risks are rising, and technology is changing customer expectations.
This combination underscores the need for insurers to create more effective risk-modeling, pricing methods and innovative products.
Insurance companies are willing to form long-term, mutually beneficial relationships with service providersAnna Medkouri, partner and insurance industry lead for ISG EMEA
“These strategic partners can create immense value by applying IT, business process and insurance domain capabilities to business transformation, often with a relatively quick turnaround time”, Anna Medkouri says.
Although the combined threats and market changes may seem to paint a bleak picture for Europe’s insurance industry, insurers in the region have viable options for coping with these concerns.
With the aid of providers, they may swiftly embrace new technologies, re-evaluate old ways of doing business, increase cooperation and efficiency and pursue innovations to meet customer needs and company goals.
The outdated infrastructure and legacy systems that many European insurers rely on contain hidden costs that have a direct impact on their bottom lineJan Erik Aase, partner and global leader, ISG Provider Lens Research
“Insurers need to prioritize next-generation technologies that stimulate innovation and streamline internal operations to increase profitability”, Jan Erik Aase says.
The report also examines how replacing obsolete IT infrastructure with more sophisticated technology can assist insurers in addressing growing risks to data security.
The report for Europe evaluates the capabilities of 36 providers across three quadrants: Life and Retirement (L&R) Insurance BPO Services, Property and Casualty (P&C) Insurance BPO Services and Insurance ITO Services.
The report names Accenture, Cognizant and TCS as Leaders in all three quadrants, while Genpact and WNS are named as Leaders in two quadrants each. Atos, Capgemini, EXL, HCLTech, Infosys, NTT DATA, Tech Mahindra and Wipro are named as Leaders in one quadrant each.
by Peter Sonner