Analysts Expound on the
Mid-tier Market in 2014
In each issue of ITA Pro, we will be asking a group of insurance technology analysts their view on
important industry issues. This month, we have three respondents to answer our question. They include
Kimberly Harris-Ferrante, research vice president with Gartner; Karen Furtado, partner with Strategy
Meets Action; and Rod Travers, executive vice president with The Nolan Group.
This month's question:
If mid-tier insurers address just one technology issue in 2014,
what should it be and why?
In 2014, it’s impera-
tive that mid-sized
insurers focus on
ligence. Mid-sized insurers have an
opportunity to build better and more
intimate customer relations than larger
organizations that have more complex
business models, channels, and are
unable to do proper customer segmen-
tation to provide tailored interactions.
Improving customer relations through
the channel network and providing
personalized experiences is key in
promoting renewals, customer sat-
isfaction, up-sell, and loyalty—all of
which are business goals of insurers.
Carving out skill-sets in customer data
management, building an omnichannel
platform, and delivering segmented
products aimed at customer demands
are also elemental in the road to cus-
Mid-sized insurers would find greater
returns on investments by taking this
route in order to not only insulate current relationships but target customer
segments that are attracted to more
intimate and personalized service.
The Nolan Company
The most important technology
issue for mid-tiers
right now is IT
models for insurers
are changing due
to the rapid evolution of technology.
Mobile technologies, social media,
business analytics, and cloud computing are driving fundamental change
in core business processes. In turn,
insurers are depending more than ever
on their IT team for innovation and
Mid-tiers are competing with larger
carriers (and other industries) for the
best and brightest IT talent. Mid-tiers
have an advantage in that they offer IT
professionals the opportunity to make
a competitive difference through innovative use of technology.
To retain great talent and attract
more, consider these steps: Set aggressive goals in terms of technology
adoption and evolution; reward and
recognize those who make a difference; and amp up recruiting efforts
even if you don’t have an immediate
need. Identify new talent that can join
your organization early in their career
and bring their enthusiasm and fresh
perspectives to your team.
Strategy Meets Action
must deal with
in 2014 is the
their core systems.
For the past five
years the level of
investments in core systems has hit
record highs among insurers. These
investment patterns are encouraging,
but this is a huge task for most insurers
and should not be underestimated in
terms of effort and importance to the
future of the business.
On average, core systems can take
three to five years to implement. To
gain the maximum benefits and a long-term advantage, the systems need to
be fully implemented within the short-est timeframe possible. Core systems
are vital to staying power and progress
in this industry.
Once the core system investments
have been made and a modern platform is in place, insurers are then able
to shift their focus to optimize business
processes and take the transformation
of the business to the next level. This
modern environment makes it easy for
insurers to plug in new technologies,
such as mobile, analytics, big data,
cloud, collaboration, and telematics.