How the Tech-Savvy Consumer Is Driving the Insurance Industry Toward Emerging Technology
Today, the quintessential Gen Y multi-tasker handles multiple things simultaneously and expects instant access to information to simplify decision-making. All leading surveys on online and mobile behavior indicate smart, articulate, and tech-savvy Gen Y is leading and pushing the technology adoption curve. About 23 percent of Gen Yers own a smartphone, 85 percent send or receive text messages and 37 percent access the mobile Internet. Most surveys also indicate that other consumers, like Baby Boomers, are also ahead of the technology adoption curve; and, as expected, seniors are on the fringes of a digital nation.
Easy access to information has changed today's consumer mindset to reveal a tech-savvy consumer who demands real-time updates, provides immediate feedback, and compares all offers before taking a decision. To cater to this consumer, there has been a staggering global growth in next-generation IT technologies and platforms. It is estimated that mobile networks now connect 90 percent of the world population and 80 percent of the rural population. Along with this, the number of Internet users has doubled between 2005 and 2010, and there are now about two billion people on the Internet globally.
The tech-savvy consumer is leading the new technology wave and could potentially transform the insurance industry in the not-too-distant future. As next-generation IT technologies like mobility, social networks, predictive analytics, virtualization, and cloud infrastructure gradually become the new mainstream, a transformed IT environment could be the launch pad for the insurers' biggest opportunity -- the creation of a transformed "IT-enabled Efficient Enterprise."
Riding the Technology Wave
The insurance industry also is clearly attentive to the potential of this huge opportunity. In an otherwise flat market, forecasts indicate that insurance technology spending in the U.S. will grow at a CAGR of 4.3 percent between 2009 and 2014. Similarly, growth at a CAGR of 4 percent is forecast for the U.K.
Currently most insurers have an Internet presence, and consumers can access insurance product information or even request a customized quote through the Web site. Some insurers have even taken a dip into mobile computing and the social media space, with followers on social media platforms like Facebook and Twitter. While these initial engagements have primarily been marketing initiatives, insurers are being encouraged to look at how new media can be used as a customer engagement tool that facilitates lead generation, builds a community around customer needs, allows targeted marketing, and creates an information source for underwriting and predictive modeling.
In parallel, insurers are leveraging traditional technology solutions like business process solutions to automate and centralize routine tasks and improve cost efficiencies and productivity. In one notable instance, our customer, an insurance industry leader, took advantage of the benefits of technology to reduce claims processing time by as much as 50 percent.
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