Prime Highlights:
Insurers in Australia and New Zealand are adopting AI and digital solutions to navigate economic, climate, and customer service challenges.
AI technologies such as automated claims processing, predictive analytics, and generative AI are becoming integral to insurance operations.
Service providers play a key role in helping insurers modernize, enhancing risk management and customer engagement.
Key Background:
Insurance companies in Australia and New Zealand are increasingly investing in digital transformation initiatives, including artificial intelligence (AI), to address the challenges posed by economic pressures, climate change, and shifting customer expectations, according to the latest report from Information Services Group (ISG). The 2024 ISG Provider Lens™ Insurance Services report highlights how the region’s insurers are leveraging AI and other advanced technologies to enhance efficiency, comply with evolving regulations, and remain competitive.
As inflation, extreme weather events, and changing consumer preferences strain traditional business models, insurers are focused on modernization efforts. This includes adopting AI for use cases such as automated claims processing, predictive analytics for risk management, and improved customer interactions. AI’s ability to simplify complex insurance products and optimize costs is seen as crucial for the industry’s future, though the full potential of AI can only be realized by cultivating and applying granular data.
“The need to innovate is critical for insurers in Australia and New Zealand, especially with competition from insurtech startups,” said Michael Gale, partner and head of ISG Asia Pacific. “Service providers are integral to these transformations, helping insurers leap forward in their technological capabilities.” In particular, property and casualty (P&C) insurers are using data analytics to improve risk assessments and personalize customer experiences, while life and retirement (L&R) insurers are turning to business process outsourcing (BPO) providers to adapt to evolving policyholder demands.
Traditional IT outsourcing remains a significant part of insurers’ budgets in the region, with many exploring a variety of strategies—such as nearshoring and offshoring—to address resource constraints. Insurers are also adopting Agile methodologies and cloud-based platforms to update their IT infrastructures. According to Jan Erik Aase, partner and global leader of ISG Provider Lens Research, “Digital transformation will require substantial investments in cloud, data management, and security, with ITO service providers becoming critical partners for insurers in this journey. “The report also examines challenges related to intellectual property rights when adopting AI and the importance of safeguarding data against leakage from AI models. The ISG Provider Lens report evaluates 40 service providers across four quadrants and names TCS and
Credit: insightssuccess.com
