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Digital Transformation in US Insurance Industry

LONDON, April 25, 2017 /PRNewswire/ -- WHAT REPORT COVERS:
This is one of the comprehensive research report published on Digital transformation of US insurance industry. Within this research report, VENN Research has covered the key challenges faced by current US insurance industry and how digital technologies are being leveraged to overcome them and transform the industry. The report progresses by highlighting the key industry risks, and challenges, market trends and impact of technology on insurance Industry value chain.

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This report has an in-depth focus on:
- Insurance Industry Risks and Challenges
- Key CIO Perspectives of Insurance Industry
- US Insurance Industry trends and forecast
- Key Investment Landscape
- IT Spending Trends of US Insurance Industry, 2014-2020
- Adoption of Digital Technologies (IoT, Cloud Computing, Automation, Analytics)
- Ladder to Digital Transformation

Customer loyalty is also low in in the insurance market, except in the cases where long term policies have been purchased. With the inclusion of price comparison websites globally, this permits customers to obtain a number of insurance quotes. In doing so, price sensitivity is affected in the insurance market.

Market players are unlikely to backward integrate into ICT and software, despite the fact they themselves maintain their own IT departments and software.

Insurers are however likely to offer reinsurance products. On this note, ICT and software houses are unlikely to forward integrate into insurance, even though reinsurers often offer insurance products. Through strict legislation dictating the legally expected behavior and action of players, Government regulatory bodies present significant entry barriers for potential new entrants. As some insurance is a legal requirement e.g. Property, Health and Motor insurance, there are no alternatives to these insurance products. Alternatives do include other financial products such as savings and investments.

The US alone constitutes more than one third of the global market value for non-life insurance.

Buyer power is weakened in the insurance market as a result of the large number of individual customers acting in the form of market consumers. The impact of losing one customer is minimal to players. Equally the volume of customers means that the customer diversity is significant, this in turn impacts on bargaining power and financial strength. An individual consumer or small to medium sized businesses have very little sway when negotiating with insurers. In these instances they are generally forced to pay the price dictated by the market players. In contrast to this, larger corporations and organizations such as government agencies have a far greater degree of influence. This boosts buyer power somewhat, however as the individual customers and the small to medium scale businesses account for the majority of the market, this increased buyer power is offset due to the masses.

Large businesses and organizations hold a greater deal of bargaining power with insurance companies as opposed to individuals. As large businesses such as airlines and pharmaceutical companies pay increased premiums in comparison to small businesses, insurance companies are more likely to lure these high-margin corporate clients; generally through loyalty discounts. This in turn increases buyer power.

Government regulation is stringent in countries such as the US, with the Insurance Regulatory Information System (IRIS) responsible for overseeing companies in the insurance market. These factors may discourage newcomers. However, the market is not as regulated as other financial services. Another threat for many insurance market players are other financial services companies entering the market: some banks and investment banks have started to offer insurance products. In some countries however, regulations are in place to prevent banks and other financial firms from entering the market, creating an entry barrier for new entrants.

Executive leaders and business unit leaders, procurement managers, advisors, Investors who have responsibilities to set their organization on Digital transformation journey.

Readers will get a deeper understanding of the current risks and challenges emerging within Insurance industry. The report touches upon the disruptive technologies like cloud, analytics, automation etc. and their impact on the industry growth, existing business models and customer experience. It highlights the growing IT investments on various IT infrastructure components. Readers will be exposed to some thumb of rules and steps to keep in mind while defining their digital business strategy and tackle the challenges during their digital journey. Finally, we provide an outlook for how the insurance market could evolve.
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