Improvements in electronic communication with customers and advisers will be key to driving revenue opportunities for providers in 2014 industry, analysts have said.
Global analysts Ovum, said the insurance industry is at an inflection point between operating in a product-orientated marketplace and operating in a customer-orientated marketplace.
Ovum said growing customer empowerment, the increasing ubiquity of mobile capabilities and minimal economic growth are making it imperative for insurers to embrace customer-centricity.
It believes that, as customers are increasingly equipped with more advanced smart devices and apps, they are exerting greater influence in their interactions with insurers.
Insurance sales channels will also expect insurers to provide them with the capabilities to create market awareness, generate business and service clients, it added.
Barry Rabkin, principal analyst, Insurance Technology, Ovum, said: "The old saying that the ‘customer is king' has never been more apparent in the insurance industry. However, to improve the level of customer focus, insurers' legacy IT systems will need modernising.
"Insurers need to integrate systems of record, such as core administration systems, with systems of engagement, such as customer channels."
Ovum's ICT Enterprise Insights -a survey of senior IT executives ever conducted - revealed that 65% of insurance CIOs are looking to increase IT spend next year, with legacy system modernisation firmly on the agenda.
Customer channels emerge as the key target for transformation, new installation, or replacement by 44% of respondents, with only 12% choosing to maintain in the current state.
Rabkin concluded: "It is imperative that insurers cross the inflection point between a product- and customer-orientated marketplace in 2014. However, they will have difficulties in accomplishing this with their decades-old underwriting and core administration legacy systems."
