The role of digital technology in the insurance ecosystem is rapidly shifting, from being a driver of marginal efficiency to an enabler of fundamental innovation and disruption.
Digital transformation provides the insurance industry with unparalleled opportunities for value creation and capture; expanding profit pools; creating new revenue models; and enabling unprecedented access to global markets.
In January of 2016, the World Economic Forum, in collaboration with Accenture, released a report on the insights and recommendations discovered in the Digital Transformation of Industries (DTI) initiative. A key component of the DTI project has been the quantification of the value at stake for both business and society over the next decade from the digital transformation of six industries. The value-at-stake analysis suggests that the “combined value” – to society and industry – of digital transformation across industries is upwards of $100 trillion over the next ten years.
Yet, digitalization could produce benefits for society that equal, or even surpass, the value created for the insurance industry – the mass adoption of autonomous vehicles and usage-based car insurance, for instance, could save around 1 million lives by 2025.
The initiative also found that both customer expectations and technology are advancing at breakneck speed: The combinatorial effects of these technologies – mobile, cloud, artificial intelligence, sensors and analytics among others – are accelerating progress exponentially: