Calculating and avoiding risk is at the core of insurance. So what are we to make of the fact that insurance executives top our list of professionals who think that the digital disruption of their industry is imminent?[i] We should take it seriously, seeing it as admirable clairvoyance rather than blind fear. Unlike many other industries, at least insurers know the risks they’re facing. But will they act upon this vision? They might have no other choice.
Digital disruption has arrived in insurance. In our new report on trends in European digital insurance, we show that years of slow growth, low consumer trust, and heavy regulation have weakened incumbents. Meanwhile, customer expectations have been rising, fuelling the appetites of startups and companies not traditionally associated with insurance, such as digital platforms, car manufacturers, utility companies, telcos, and sensor and wearable manufacturers, whose utility and access to consumer data has placed them dangerously close to the core of insurance.
I’m writing this on the train. On my iPad. Connected to the internet (albeit intermittently, thanks to the occasional tunnel) while trundling through the British countryside. I booked my ticket online with Expedia. I used the Trainline app to check the most up to date timetable info just before I left the office. Digital is enhancing my journey. Making it easier.
Every single one of my fellow travelers, with the exception of the sleeping Hipster opposite me, has immersed themselves in their own digital worlds. They tap the screens of smartphones. They watch movies on their tablets. They type meeting notes on their laptops.
The world has gone digital.
But that’s not a surprise, right? Digital is a boardroom topic these days. C-level executives who barely had the faintest notion of what “digital” was a few years ago are waking up the threat that digital disruption poses to their business. Spurred on by apocryphal tales of iconic brands who flushed their futures down the digital toilet, they are facing the reality that their businesses need to take digital seriously.
But here’s the kicker. While senior executives in many firms may now understand the importance of digital for their firm’s survival, few know what to do about it.
At Forrester, we recently ran one of our largest ever global executive surveys in partnership with Russell Reynolds. We asked firms about their digital strategies. Here’s what we found:
Seventy three percent of firms that think they have a digital strategy. If this sounds high, that’s because many of these firms are mistaking the fact that they have a website, or a mobile app, as having a digital strategy.