Younger Consumers’ Demands Push Insurers to Break the Traditional Business Model Molds

By Richard Daukant, SAP Canada

Sept. 2008 — For decades, the insurance industry used tried and true business models to meet customer needs, make profits, expand business, reduce risk, and satisfy regulatory requirements — all while remaining one step ahead of the competition. But now, rapid and shifting changes in the global marketplace have forced insurance carriers to abandon the traditional ways of doing business.

More and more, they are looking to information technology to help them adapt to new business challenges. Among these challenges are increased pressure for profitability and revenue growth, risk management, and growing customer demands for online quotations, one-stop shopping, and faster introduction of new products and services.

And in the years to come, much more radical consumer behavior patterns will be driven out of Generation NOW, today’s teenagers who are the first generation to grow up with the Internet, cell phones, instant messaging, microwave ovens, MP3 players, and other technological advances, and to whom an insurance company is a Web site. Driven by a spirit of spontaneity, this generation doesn’t just seize the day, they seize the moment and, as a result, insurers must gear up to meet the demands this sense of immediacy brings.

Having insurance-specific solutions to build upon a flexible and scalable platform provides the foundation for addressing the many challenges faced by insurers, from increased pressure for profitability and revenue growth to faster introduction of new products and services. Change is never easy, but to stand complacent and steeped in tradition without an eye toward innovation in today’s market is to lag behind. The good news is that insurance providers that persevere can make the leap — and reap these rewards in this decade and beyond, for this Generation NOW and those whose future demands are yet unknown.

Read Richard’s full article.

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Source: SAP Canada