Why 2021 Is All About Insurance Racing Towards Digital Supremacy

4 min readAug 19, 2021


Many insurers have been transforming their organizations, or at least claiming to — into digital businesses. After 2020, there is simply no excuse.

Since 2020, insurers have been forced to accept a new reality in which they must be agile and be able to respond to any event. For insurers risk has become the rule, and not the exception. This need for agility, and simple, fast, transparent processes has realigned the focus towards eliminating processing times and simplifying customer experience. And it is clear that only technology augmentation will deliver this digital transformation.

Between now and 2023, both claims processing, underwriting & risk assessment will change dramatically to focus on the digital future of the business according to Cognizant’s recent research undertaken among 4,000 global executives spanning sectors including insurance.

Digital expectations must be met

The research has made it clear that insurers have to implement the best and quickest decisions — with AI and figure out how to balance automation and algorithms with human insights and judgment.

With their customers’ skyrocketing expectations for a more holistic, personalized and proactive approach to life and wellbeing — delivering instantaneous solutions with a tap on a screen, are precisely the products needed now.

Both underwriting and claims handling must be streamlined to detect fraud and make smarter decisions while minimizing unnecessary human interaction to reduce inaccuracies and bias.

And so, a fully developed, sophisticated and scalable digital platform is the only means for insurers to ensure commercial relevance and a financial future in this decade. Some of the key takeaways of the study are:

01 Thriving insurance requires data mastery

Source: Cognizant Centre for the Future of Work

Almost 91% of the respondents in the survey identified a deep and sustained change in the insurance industry between now and 2023. This implies that data is going to be the single most important factor for insurers to harness and deliver success in their businesses.

Hyperconnectivity between insurers and machines — IoT (49%), automation (46%), & analytics (45%) is going to have a strong impact and be the key challenge for insurers in the coming years. Security & privacy (44%), and digital regulation (44%) also emerged important for successful digital transformation of incumbents.

Hence, insurers will have to steer towards building algorithms to interpret current behavioral data, which is why APIs are now absolutely essential to connecting all parts of their business.

02 Traditional insurers are in a digital arms race

Interestingly, just under 32% of insurance executives believe they are ahead of their competitors in terms of digital capabilities, and almost double of that –60% anticipate being ahead of their competitors by 2023.

Source: Cognizant Centre for the Future of Work

The levels of revenue flowing through digital channels is projected to increase by more than 50%, jumping from 10% in 2021 to 16% in 2023. This means creating seamless processes that deliver greater efficiencies and allow faster product innovation.

Digital-first customers are not expected to remain loyal unless their needs are met. Besides, it is not only consumers who want integrated products, but business clients also want modular services and bundled products. This need for integrated products will require new partnerships to build a new data-driven ecosystem. Zero touch processes that enable risk modelling, scale, capability to operate across disparate systems, and deliver meaningful analysis from data will assist insurers in building new products.

03 Intelligent machines will reduce the claim cycle to seconds

The shift towards zero touch claims processing is going to increase exponentially from 16% to 58% in 2023. Underwriting and risk assessment will experience a 5x increase in the widespread of augmentation, reaching 49% in 2023, against a mere 9% today.

Source: Cognizant Centre for the Future of Work

The pace of industry disruption is going to get faster, and talent will be in short supply on a global basis as requirements will change dramatically and jobs will become more specialised.

04 Work and jobs are transforming at a rapid pace

Greatest disruption in the near future can arise from the lack of relevant skills for a majority of big data specialists, data visualisation experts, data integrators, process automation experts, security analysts, robotics engineers, blockchain specialists, machine learning engineers, and many more.

Upskilling of employees will be an additional and pertinent need — to augment what machines won’t be able to achieve. Insurers must reflow work across the business and give their teams a fresh perspective, and rethink jobs for new digital tasks and roles.

Emerging into the digital future for insurers is no longer just a nice-to-have addition. Digital is essential for insurers who want to stay relevant, and need to act now, by building robust API-driven strategies that can reorganise for speed and agility.

The quality, speed and agility of a modern insurance company will be decided by decisions that impact everything — from brand perception to revenue growth, especially when pricing and underwriting risk. Staying relevant means continuously modernizing decision-making frameworks, which can deliver the best decisions at speed.

How well insurers integrate people and machines, and make decision-making open and transparent, will ensure who the customer trusts as the future of insurance unfolds.