What Do You Think?
Nothing to Fear, but Fear Itself
The excitement of the future is usually accompanied by trepidation. For all the good that modern
platforms can do for the business, many business (and IT) leaders also know there is an incredible
amount of work that goes into making these changes feel natural and unforced. We asked three
industry consultants to give their view on how insurance companies view the future. Taking part are:
Mike Fitzgerald, a senior analyst with Celent; Mitch Wein, vice president of research and consulting at
Novarica; and Rod Travers, executive vice president of The Nolan Co.
This month’s question:
What is the prevailing feeling from the business side of insurance companies
concerning new technology? Fear or excitement?
The Nolan Co.
I sense a good deal
of change fatigue.
asked, and body
language read, I
perceive that IT
people in most
insurers are over-
whelmed with the flow of new technolo-
gy. The frenetic excitement and urgency
that accompanies them contributes to
shell-shock. Benefits from administra-
tion system renewal have not been fully
realized, so routine maintenance and
never-ending regulatory changes absorb
are being asked to
respond to a myriad
of changes. Some
challenges they see
breaking the rules,
ance to bad process,
I would charac-
terize the feeling on
the business side as
a combination of en-
thusiasm and uncer-
often the champions
of new technology
because it can transform capabilities, im-
prove results, and create competitive dif-
ferentiation. At the same time, too many
insurance technology initiatives have a
reputation for not delivering as promised
and business stakeholders know this from
60 percent or more of their effort.
The majority of insurers have not built
processes and organizational structures
to handle this flow of new technology.
Without a deliberate approach in place,
the response is reactionary.
This is beginning to change, such as
with the recent interest in blockchain
technology. While this is being pursued
by banks, insurance applications are only
now coming into focus. Insurers with
innovation labs and fast-cycle development processes are using them to evaluate the possibilities. AXA and Allianz,
for instance, recently announced their
innovation teams are partnering with
selected start-ups to look at opportunities in this space.
What I hear in talking to CIOs who
are baby boomers is, “Thank God I’m
retiring soon” or “That’s sci-fi, why are we
talking about it?” If you talk about drones
assessing property damage, water valves
transmitting leak information, cameras
in cars collecting facial expressions while
driving to determine road rage, injectable
nano-chips that collect health information, and real-time collaboration between
agents, underwriters and insureds, some
executives see challenges, but others see
Here are some guiding principles for implementing new technology successfully:
K Avoid the “silver bullet” syndrome.
Technology is an enabler, not a business model. No technology will solve
fundamental business flaws.
K Invest in a future-state design effort
as a precursor to new technology.
Of course, there are many possible
futures. IT executives will need to accept
the future that consumers decide and understand in the 21st century that change is
the only constant.
Otherwise you’ll speed up outdated
business processes and you won’t get
the results you or your CEO expect.
K Manage new technology implementation as a business transformation
effort and put change management
front and center. It actually takes less
time, costs less, and produces better
results when you approach it this way.