Digital Strategies in Insurance: Lessons from China

by Wenli Yuan, August 4, 2015
Industry Trends
Asia-Pacific

Abstract

Based on trends in China's insurance market, Celent suggests a digital strategy that is built around analytics and automation.

In the report Digital Strategies in Insurance: Lessons from China, Celent suggests a digital strategy that will enable initiatives arising from Internet thinking to be sustainable. The backbone of this strategy is analytics and automation. The focus is to deliver a customized but consistent user experience across all channels.

Future disruptive competition may come from other industries that have massive consumer data and have already used analytics technology to understand consumers and provide personalized products/services. Understanding the customer-centric, analytics-driven digital strategy can prepare insurers to compete with newcomers. Insurers that have the capability to obtain external data, integrate internal and external data, analyze the data, and provide the consumer with valuable personalized service based on the analytics result could be the future winners.

In the report Celent also discusses issues around data, analytics, automation, customer engagement, and user experience.

“In the future, real-time data will be more important than historical data; external data will be more important than internal data; and the study of the full amount of data will be more important than the study of samples,” says Wenli Yuan, a senior analyst with Celent’s Asian Financial Services group and author of the report. “Insurers need a paradigm shift and need to consider how to prepare the organization to take advantage of these external opportunities, evolve the architecture, and build new capabilities.”

Insurers need to keep an eye on the entire ecosystem, and consider their position and value within the big picture. Meanwhile, insurers also need to be aware of emerging technologies, and study the change they may bring to the business.

The strategy suggested in this report is based on the observation of trends in China, and might look different than what we see in North America or EMEA. Some strategies in China have developed further than elsewhere, yet still have potential for other markets (for example strategies involving elaborate ecosystems of partners and innovative approaches to customer engagement). Detailed examples of models in China can be found in the Celent report Evolving Digital Business Models: How China Is Advancing the Insurance Proposition to Take Advantage of the Digital Age.

This report is a proposal for insurers — not only Chinese insurers who leverage Internet thinking and bring innovation to the industry, but also insurers in other countries that are operating in a pan-Internet environment.

This report contains one table and six figures.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

1

 

Key Research Questions

1

Introduction

3

Insurance Digital Strategy

4

 

Data Analytics and Automation

5

 

Deliver Customized But Consistent User Experience Across All Channels

5

 

Change in Products and Services, Technology, and Organization

5

 

Deliver Demonstrable and Sustainable Value

6

 

Customer-Centric

6

Data

9

 

Internal and External Data

9

 

Paradigm Shift

9

 

New Players: Digital Organizations

11

 

Data Security and Privacy

11

 

Need to Consider Moral Risk

11

Analytics

13

 

What Analytics Means to Insurers

13

 

Provide Instant Insight

14

 

Predictive Analytics

14

 

General Analytics Areas

15

 

Social Data Analysis

16

 

Change Product Pricing Model

16

 

Better Segmentation and Personalization

17

 

Innovative Product

17

 

New Business Model: Expand Value Chain

18

Automation

20

Customer Engagement

22

 

Existing Customers; Create Regular and Meaningful Contact Points

22

 

Leverage Social Economy and Provide Scenario-Based Services

22

 

Engage with Customers Across All Channels

23

 

Engage Customers in the Broader Ecosystem

24

User Experience

25

 

Customized But Consistent Experience

25

 

Multichannel Platform

27

Conclusion

28

Leveraging Celent’s Expertise

29

 

Support for Financial Institutions

29

 

Support for Vendors

29

Related Celent Research

30

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