It probably isn't surprising that New York-based PwC, in creating its "Top Issues: The Insurance Industry in 2012" report, deemed 2012 "the year of the customer" in insurance. Customer experience initiatives are in full swing at insurers regardless of size, line of business, or technological maturity.
Insurers are "redesigning their operating models' focus to serving customers' needs rather just pushing products," PwC says in the report, adding that this "requires a transformation of leadership models, internal culture, and performance drivers."
The major technological enabler of this is "big data," which PwC defines as the combination of sophisticated technologies and devices communicating with each other in real-time and the use of of unstructured multimedia data such as audio and video. The company believes this gives insurers the a ability to "enhance underwriting processes, reduce cycle time, facilitate better pricing, improve loss control and better inform decision making related to customer acquisition and retention."
[Read how big data is changing claims.]
"One of the largest challenges insurers will face in 2012 and beyond is capturing and interpreting data from a growing number of structured and unstructured sources, including but not limited to social media, policy-holder behavior and telematics," Jamie Yoder, PwC's US insurance advisory practice co-leader, says in a statement announcing the report. "Insurers that apply advanced analytical techniques to harness the power of big data will be better able to understand their customers, tailor products to meet their needs, and enhance the overall customer experience."
Other trends PwC identified are a focus on emerging markets as an important part of insurers' growth strategies and an increase in investments to meet regulatory demands and better manage risk.
"In preparing for NAIC ORSA and Europe's Solvency II regulation, insurers are starting to integrate strategic and risk management analyses for planning and decision-making purposes," says Joe Calandro, PwC US insurance advisory managing director, in a statement. "This benefits customers and other stakeholders because it could help insurance companies manage their capital more efficiently, especially with respect to potential unexpected changes in the marketplace."