Insurers across the Middle East are rapidly adopting digital strategies in order to boost outreach to millennials, according to SAP.
Insurers are in agreement that the growing customer base of millennials — generally considered those born between the early 1980s to the late 1990s — has heightened expectations for their carriers, according to a new SAP survey of 200 insurance executives at the recent IASA Annual Conference on factors motivating insurers’ innovation strategies.
In the GCC, the expanding population is driving insurance industry growth, with the market set to increase from $16.3 billion in 2012 to $37.5 billion in 2017, according to a report from Alpen Capital. Across the Middle East, there are 90 million millennials, who comprise 40 percent of the region’s population, according to a report from loyalty management company AIMIA.
Fifty-five percent of respondents cited convenience as millennials’ top priority when seeking insurance products, with low cost (22 percent) and relationships with their agent (16 percent) followed by brand recognition (8 percent).
This has forced many insurers to consider a more adaptable product strategy. More than half (52 percent) of respondents noted that their primary strategy to reach millennials has focused on investing in online, mobile and social technologies to reach customers across channels. Twenty-one percent indicated they are tailoring products to suit millennials’ unique needs and 12 percent are investing in data analytics to segment and target communications.
Thirty-four percent of respondents indicated that rising consumer expectations are their primary driver for new product development, followed by changing regulatory demands (22 percent) and availability of new technologies (20 percent).
Yet while insurers remain focused on the customer experience, updating their back-end infrastructure continues to be a priority as they seek to inject agility and speed throughout their processes. Fifty-one percent of respondents indicated their organization has adopted cloud computing in some capacity.
While nearly half of these respondents have implemented cloud-based systems for back-office functions — anecdotally citing HR, accounting and procurement — others have adopted cloud for mission-critical functions like policy administration (18 percent), product development (seven percent), claims processing (six percent) and risk management (six percent).© Copyright - Saudi Gazette