Increasing internet penetration, adoption of smartphone and tablets, and social media usage are changing the way people take care of their daily business. Insurers are leveraging the wide reach provided by the joint force of the internet, smartphone, and social media and this is giving rise to greater investment in alternative insurance channels. However, the importance of the alternative channels strategy by insurers varies globally due to different levels of maturity of internet, smartphone and social media adoption.
Even though insurers are building up their alternative channels strategy, they still continue to invest in traditional channels as well. Globally the focus on traditional channels is driven by various triggers which vary across different regions. For example, in the Asia-Pacific region, the choice of insurance channel is mainly driven by the still growing insurance market where insurers are trying to attract customers from various segments. In this region, because of the complex nature of life insurance products, insurers are likely to build capability for personal financial advisors. At the same time, insurers in Asia-Pacific are likely to invest in traditional channels to capture the increasing middle class customer segment.
Insurers are investing in technologies (SaaS, analytics, telematics etc.) to improve customer experience while reducing operational cost. Insurers are implementing SaaS solutions for their non-core systems which improve the system efficiency at a lower cost. Insurers are also leveraging the enormous data captured from online channels such as internet and social media and using data analytics to analyze this data. Advancement in data analytics is making it easier for sensor based technology adoption, which is driving the adoption of usage based insurance.