Asia's Insurers to Focus on Customer Experience in 2012; IDC Financial Insights predicts Data Integration and Analytics Projects to be on the Rise

Kuala Lumpur – December 2, 2011 – Insurers are facing increasingly savvy, demanding and capricious customers. IDC Financial Insights predicts that to better manage client relationships in 2012, insurers in Asia/Pacific will be thinking more strategically about organizing, synchronizing and consolidating disparate customer information to create a "single version of the truth". They will also be making investments in analytics to gain deeper insights into their policyholders and to tailor-make more appropriate products and customer experiences.

More findings are revealed in a forthcoming IDC Financial Insights report, “Asia/Pacific Insurance 2012 Top 10 Predictions: Strategic Initiatives for Insurers to Carpe Diem”, which delineates IDC Financial Insights' predictions on 10 core business, operational, and technology strategic initiatives required for insurers to seize the day.

"As the very real possibility of another global downturn casts a pall over Asia/Pacific's insurance sector, we see even greater urgency for players to forge ahead with a dynamic and lean business framework supported by the smart utilization of technology," remarks Li-May Chew, CFA, Associate Research Director for IDC Financial Insights Asia/Pacific.

"Strategic initiatives that will enable insurers to carpe diem, or make the most out of the current situation as we venture guardedly into 2012 include: focusing on data integration and analysis to boost customer experiences, innovating and delivering on a multichannel model, demonstrating proactive risk stewardship in light of escalating regulatory and compliance requirements, optimizing on business transformation initiatives, and raising productivity and allegiance of the agency force," states Chew.

She adds, "Insurers will also be deeply engrossed in countering fraudulent activities, working on enhancing core insurance applications, and diversifying into ancillary lines of businesses. Meanwhile, we predict technology spending to grow 5-10% in 2012. In countries where regulations do not restrict its use, some of this spending would be channeled into cost-effective technology architectures such as cloud computing."

Table 1 presents three of IDC Financial Insights Asia/Pacific's top 10 insurance predictions for 2012, listed by order of importance. This list incorporates opinions formulated from ongoing research, survey, and conversations with industry practitioners and technology vendors serving the insurance community. It also takes into consideration findings from a 3Q2011 IDC Financial Insights' regional insurance survey where respondents ranked the strategic areas that they will be gravitating toward in 2012.

Table 1: Top 3 Predictions for Asia/Pacific Insurance, 2012

Rank	Prediction	Description
1	Data Integration and Analysis Continue to Shift to a Higher Gear as Insurers Place Concerted Focus on Raising Customer Experiences	Insurers are facing increasingly savvy, demanding, and capricious customers. To better manage client relationships, they are thinking more strategically about organizing, synchronizing and consolidating disparate customer information to create a "single version of the truth" on these customers. They are also making investments in analytics to gain deeper insights into their policyholders and to tailor-make more appropriate products and customer experiences.
2	The Customer of the Future is Multimodal and Insurers would need to Expand and Innovate on their Indirect Distribution Network	Consumers prefer to have a choice of interaction points and would not hesitate to switch carriers if their preferred channels are not available or operating efficiently. Insurers are therefore, increasingly offering alternative distribution channels (the predominant ones being: bancassurance, Web portals, and mobile devices) to cater to the divergent buying preferences of policyholders. At the same time, insurers must be able to present their customers with a cohesive channel message and branding.
3	Risk Management Remains Crucial, Despite - or Perhaps Because of - the Current Uncertain Economic Climate	Insurers are bolstering their investment in risk management to be able to determine risk tolerance, align risk appetite and strategy, and thereby make more intelligent risk decisions. Focus is around instituting stronger internal controls and in selective spending in areas such as enterprise risk management (ERM) and Solvency II to alleviate corporate risk.

Source: IDC Financial Insights, 2011

Insurers that wish to prosper during the turbulent times in 2012 would do well by having clear management actions to: refresh their customer focus, re-invent distribution and reduce capital expenditures, drive innovation in product design, review the product mix, and capture new opportunities (particularly within niche segments such as health, pension and microinsurance, which have the potential to become big business propositions).

On the technology front, IDC Financial Insights recommends that insurers reconfigure their projects into smaller iterations and redirect resources to CRM-related initiatives, ensure that their IT teams speak the same language as the business divisions, and, engage with vendors regularly to ensure that their performance is closely managed and monitored.

For more information about this report, “Asia/Pacific Insurance 2012 Top 10 Predictions: Strategic Initiatives for Insurers to Carpe Diem” (forthcoming), please contact Juliana Lai at +603-2177-9255 or julianalai@idc.com.