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 — have 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 per cent of the region’s population, according to a report from loyalty management company AIMIA.

About 55 per cent of respondents cited convenience as millennials’ top priority when seeking insurance products, with low cost (22 per cent) and relationships with their agent (16 per cent) followed by brand recognition (eight per cent).

More than half (52 per cent) 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, while 21 per cent indicated they are tailoring products to suit millennials’ unique needs and 12 per cent are investing in data analytics to segment and target communications.

Meanwhile, about 34 per cent of respondents indicated that rising consumer expectations are their primary driver for new product development, followed by changing regulatory demands (22 per cent) and availability of new technologies (20 per cent).

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 per cent), product development (seven per cent), claims processing (six percent) and risk management (six per cent), said the survey.

Ross Orrett, global head of insurance industry innovation and development, SAP, said: “Cloud computing has matured and we’re seeing insurers shift from leveraging the cloud for just back-office functions to implementing cloud across the entire organization.

“Insurers are becoming more adaptable and laser-focused on meeting changing customer needs. To be innovative in its products and the way it serves agents/brokers and customers to meet these demands, carriers are investing in industrialising the back-end with integrated, agile infrastructure while innovation across these systems.”

Insurers have also acknowledged the barriers to cloud adoption in their organisations.

One-third of respondents cited security concerns as the primary challenge for adopting cloud computing, while lack of internal buy-in was another key factor (28 per cent), followed by budget and financial concerns (13 per cent), unstable technological infrastructure (13 per cent) and lack of time (12 per cent). - TradeArabia News Service