Tag: IoT

Insurer of the Future Will Use Technology to Shift from ‘Insuring Loss’ to ‘Ensuring Protection’ | Press Release

Also, bundling of insurance with products and services across industries is on the rise, creating a new breed of ‘invisible insurer’

Everest Group reports that two major trends are shaping the future of insurance, driving insurers to redefine their business strategies and IT outsourcing engagements. First, insurers are moving from passively “insuring loss” and managing claims to proactively “ensuring protection” for customers. Second, insurers are bundling insurance with products and services across a broad spectrum of industries, with insurers themselves increasingly becoming invisible to the end customer.

To navigate these shifts, the insurer of the future will leverage next-generation technologies such as analytics, artificial intelligence (AI), blockchain and IoT.

For example:

  • Insurers are already using IoT to “ensure protection” by monitoring homes (smoke and carbon monoxide alarms), cars (mileage, driving patterns), persons (exercise, lifestyle patterns), and businesses (boilers and water systems).
  • Insurers will use digital channels to sell hyper-personalized products; for instance, an insurer’s mobile application might use geo-location data to offer travel or airline insurance to a customer who is at the airport.
  • Insurance will be bundled with products and services. Market leaders have already begun bundling insurance with remittance transfers and real estate purchases. As this trend expands across all industries, insurers will become “invisible” to the end user.
  • Insurers will tap the connected ecosystem to underwrite risk in near actual time. Analytics and AI will be used on real-time as well as historical data to assess risk, generate quotes, negotiate premiums and execute smart contracts.
  • Policy administration processes are already shifting from being highly manual and paper based to automated and digitized, and this will rise to another level as connected systems, blockchain and machine learning applications mature.
  • Machine learning will transform a highly manual, reactive claims management process to an automated, proactive one, and blockchain technology is showing transformative potential for use cases such as claims validation, fraud detection and prevention, and automated claims payments.

These are just a few ways technology will play a major role in the transformation of the insurance industry over the next decade as insurers shift focus from “protection” to “prevention” and as the bundling of insurance with products and services becomes more prevalent. Today, insurers have begun collaborating with IT service providers to build and evaluate proof-of-concepts, develop customized solution offerings, and test use cases in innovation labs and centers of excellence.

“We’re already seeing evidence of insurers beginning to embrace their future reality,” said Jimit Arora, partner and leader of the IT Services research practice at Everest Group. “For instance, insurers are moving from long-term, traditional IT outsourcing projects to short-term, digital projects. These projects allow insurers to adopt emerging technologies, reduce time-to-market, and improve customer experience. We’re also seeing a steep rise in demand for artificial intelligence, blockchain, IoT, and automation in the scope of insurance IT outsourcing contracts.”

Insurance constitutes 30-35 percent market share of the overall US$142 billion BFSI (banking, financial services and insurance) IT outsourcing industry. Over the past four years, the insurance ITO market size has grown by a CAGR of 5.3 percent, and going forward it is expected to grow at a steady rate of 4-6 percent. Digital services components were included in 46 percent of the 348 insurance ITO deals signed in 2016 and analyzed by Everest Group. The deals having automation in scope increased by nearly 250 percent while deals involving IoT, blockchain and AI nearly tripled.

These findings and more are explored in detail in Everest Group’s recently published report, “Insurer of the Future: Insurance ITO Annual Report 2018.” The report explores key trends in the insurance industry and their implications for application services outsourcing.

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Enterprises Warming to IoT According to Everest Group Research | Press Release

Industrial IoT offers faster return on investment for global service providers striving to meet enterprise demand

Internet of Things (IoT) is among the top three priorities for digital transformation for enterprises across industries; however, to move forward, companies will have to overcome key challenges, among them a complex ecosystem, data privacy and security issues, critical infrastructure and platform decisions, and investment challenges, according to Everest Group.

Currently, enterprises in the manufacturing and energy & utility sectors are the leading IoT adoptors. Industrial applications of IoT (commonly referred to as IIoT) are instrumental in increasing machinery uptime, enabling end-to-end supply chain visibility, reducing energy costs and preventing infrastructure failures. Service providers, too, have a high interest in IIoT, because IIoT offers faster return on investment than consumer IoT such as wearables and smart home devices.

Everest Group describes IoT and IIoT trends and the investments that service providers are making to capitalize on this new growth opportunity in its recently released Market Vista™: Q2 2017 report.

In addition, the report discusses outsourcing transaction trends, GIC-related developments, global offshoring dynamics, location risks and opportunities, and key service provider developments.

“Although transaction activity declined slightly in Q2 compared to Q1, it was a good quarter for the sourcing industry in many other aspects,” said H. Karthik, partner at Everest Group. “GIC market activity increased; location activity in Q2 was at an all-time high, with Europe, in particular, witnessing significant growth in activity compared to Q1; and most service providers reported sequential growth in revenues.”

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Everest Group held a webinar on August 17 in which the findings of the “Market Vista: Q2 2017” report were reviewed. During this one-hour webinar, Everest Group experts discussed the factors disrupting the sourcing market—including digital technologies, regulatory changes and geo-political dynamics—and shared how multiple startups have emerged to fill the innovation gaps with new solutions and platforms. A particular focus of the webinar was the increasing adoption of U.S. domestic sourcing. Everest Group experts described the drivers behind increasing adoption and the experiences of firms in managing their domestic sourcing strategies.

Key Market Trends in Q2 2017

  • GIC activity continues to be driven by existing adopters, with focus on establishing R&D centers for next-generation technologies.
  • Outsourcing demand from the United Kingdom continued to remain low due to uncertainty with Brexit and reduced outsourcing by cash-strapped healthcare and government sectors.
  • Reduced revenue growth is pushing service providers to form partnerships rather than invest in acquisitions.
  • Leading locations—India in Asia Pacific, Northern Ireland and Romania in nearshore Europe, and Brazil in Latin America—witnessed a spike in new delivery center setups

***A complimentary 4-page preview of the report is available for download here.*** (Registration required.)

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