By Deb Smallwood
2014 was not the norm for
our traditionally “steady and
slow” industry. Transformation and wise technology
investments continue to
be significant in insurance.
Moreover, the positive impact
to the business and resulting
will become increasingly apparent in 2015 and beyond.
We are now seeing these
investments pay off in major
ways—better service, increased efficiency and accuracy,
improved insight for effective management of the business and operations, and, more importantly, positioning
So what is the impetus behind this momentum and
progress? SMA observes three primary factors behind
the stimulus, all working in concert to propel the industry
forward as a whole and to create unique advantages for
individual insurance companies.
First, the digital shift is forcing change. The world around
us is changing dramatically. Customers are elevating
expectations. External influence is playing an increasingly powerful role in shaping our industry’s future. Many
insurers are actively exploring, researching, and running
proof-of-concept projects around proven and promising
technologies, watching other industries, and capitalizing
on their experience.
Second, tremendous investment and effort has been
made to modernize and optimize core systems and
to deploy flexible and scalable business and technology environments. We are nearing a tipping point with
about 25 percent of insurers well along the path of their
modernization journey and now using platforms that are
more agile than ever before.
This modernized environment enables insurance com-
panies to do amazing things to optimize their business-
es. They can quickly capitalize on new and emerging
technologies. A plug-and-play architecture is giving
these insurers the ability to rapidly deploy new products,
create new customer experiences, and capitalize on the
advantages while the opportunity is ripe.
Lastly, but certainly not diminished in importance,
insurers are actively taking steps to create a culture
for innovation. They are stepping up to the challenge
and creating new opportunities. They are aggressively
working to rethink and reinvent the business—viewing
opportunities from the inside and outside of the industry
with a new creative lens, opening the doors to the digital
world, and embracing customers and partners that live
and work in new ways.
Looking ahead to the next few years, SMA envisions
2015 will indeed be the year where modernized core systems and technology platforms enable differentiation in
the marketplace. We will see more insurers concentrate
priorities around becoming Next-Gen Insurers and equip
their organizations to reap the benefits of tomorrow’s
opportunities in our new digital world.
Insurers will continue their focus on the customer, transitioning from internally-focused operations to deliver
nimble and personalized contextual customer experiences. There will be ongoing investment in the capabilities
that support bringing new products to market quickly,
including customized and bundled offerings. We will
see more insurers move from rigid systems to dynamic
architectures that use scalable computing power. As
more insurers gain sophistication in how they manage
and integrate data and use analytics, new levels of agility
in risk/portfolio balance, market approach, and organizational structure will be recognized.
There are great stories of success in the marketplace,
and there will be many more in 2015. SMA notes that it is
not just market leaders making progress; there are many
market movers doing remarkable things. Good years lie
ahead. It is an exciting time to be part of our industry.
(Deb Smallwood is the founder of Strategy Meets
Action (SMA) , an advisory services firm offering
retainers, research, consulting, events, and innovation
offerings to both insurance companies and solution
providers. She can be reached at email@example.com.)
Modernization Investments Propel Insurance Industry Forward