Demand for transformation
The figures were revealed inside PwC’s new Digital SME Insurance Survey of 2,100 small businesses from 14 global countries. It indicates that SMEs are interested in purchasing online-based insurance solutions as the sector begins to digitally transform.
Recently founded companies are the most eager to interact with their insurers digitally. 48 percent of companies under a year old said they want to purchase their insurance products online. The figure is just 37 percent for companies over ten years old. Newer startups are more likely to desire the efficiency and customisation benefits offered by online products.
The findings show that insurers who are already digitally transforming have a significant advantage when seeking new customers. As more new SMEs are formed, they’re increasingly likely to choose an insurer with an online customer-centric service. This gives insurers a chance to overhaul their business and emerge as a leader in the digital insurance sector.
Tailoring products
The demand for digital insurance products also presents new challenges to the industry. Insurers will have to understand what their customers want if they’re to develop successful tailored solutions. They’ll also have to appreciate the technical capabilities of their underlying platforms so they can innovate and evolve at a similar pace to their customers.
PwC said the opportunities opening to insurers present an “open door” to new products. However, the company’s global insurance leader Steve O’Hearn noted digital insurance initiatives face several potential roadblocks before they achieve success. One of the biggest challenges will be in replacing current insurance operating models with more agile digital-focused alternatives.
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“Insurers must have the capabilities to understand their customers and have technical solutions allowing them to rapidly evolve and adapt solutions as the market changes, said O’Hearn. “They also should look at an emerging generation of startups not just as customers but as potential partners in providing new technology solutions and value-added services, creating more responsive, and targeted solutions.”
The study also found insurers need to become more effective at selling insurance to digital businesses. Uptake of cybersecurity insurance is very low, with just 16 percent of firms having active cover. Over 46 percent of the 2,100 survey respondents said cyber insurance could be applicable to their business. Lack of cover could lead companies into severe financial difficulties if a serious cybersecurity incident occurs.
