Also important this year, we can expect insurers that master
data from all angles will lead. It is no surprise that maintaining the edge on data will continue to be paramount to lead-ing in business. Proper manipulation of data is what makes
SMA also predicts further expansion in the insurance
ecosystem, with more mergers and acquisitions happening
with greater frequency. Venture capital firms and startups are
partnering at levels beyond imagination. Even large insurance
companies are creating their own VC firms to invest in technology startups and stay ahead of the boom. This will change the
landscape and ecosystem as we know it, and the market in 2017
won’t be the same as it is today.
Next, the transformation to digital will take hold and focus
on the customer and distribution and channel-expansion investments. The change in how insurance is consumed will force
companies to make a digital footprint. The customer of today
expects a digital interface for both quotes and service.
And speaking of the customer, servicing them in the style
in which they have become accustomed by outside industries
is the most game-changing motivator of all. If the customer
doesn’t get what they want, the customer will have plenty of
other vendors and suppliers to choose from. And with all of
the new technology, new startups, new business models, and
new entrants to the industry that are ready to compete for the
customer’s business, insurers need to make the customer the
number-one driver of their business strategies.
Even though core systems are not one of the four top
game-changers, they deserve recognition because they will
still be a big focus for many insurers. Having the platforms in
place that will enable insurers to excel in the new norm is key.
However, those who invest only in core will just fall further
behind. It is true, a modern core system is critical and essential,
but insurers cannot afford to be solely consumed with core
modernization. This is the year to expand the opportunities that
modern core systems provide in order to experience the agility
of the solutions and data analytics that are now available.
Finally, the pace and progress of technology will not slow
down and the availability of technology will not decrease. In
fact, in 2016 we will see the gap between available technology
and technology adoption grow smaller. So, this is the perfect
time for planning, finding your way into the new norm, and
reaping business value from your technology investments.
Preparing for New Norm
Given the task, it might seem easier to shy away and continue
business as usual, but by this time next year, business as usual
will look just that much more like the new norm. It will be
bigger, faster, and more complex. So insurers have no choice but
to plan now and adjust as necessary.
K The first step is to be aware. Understand the internal and ex-
ternal influencers. Know the game-changers and how they
impact your business. Look at threats and opportunities and
adapt your plans accordingly.
K Second, get clarity. Define who you are in the new norm.
Are you an influencer? Do you have the infrastructure to
withstand transformation? If not, what must you change?
Understand who you are now and what and where you want
to be by this time next year.
K Third, pick two or three specific strategic initiatives and
move toward them this year. Go beyond core. Start with
clear investment goals that will differentiate you from the
majority and could ultimately lead to bigger, better transfor-
mations as you start down that road.
K Fourth, connect today to tomorrow. Put innovative thinking
in the forefront of all decisions and investments this year.
Think differently about your execution and delivery. Look
externally for inspiration.
Finally, as you begin this New Year, keep a close watch on
the shifts and evolution of the industry. It is literally changing
before our eyes every day. Look for ways to improve, and explore the opportunities as we all shift to the new norm. It is an
exciting time and will prove to be a wonderful year. ITA
Deb Smallwood, the founder of SMA, is recognized for
her expertise in investing in technology to influence competitive advantage in the insurance industry. She can be
reached at 603-770-9090 or at dsmallwood@strategy-
The pace and progress of
technology will not slow
down and the availability of
technology will not decrease.
In fact, in 2016 we will see
the gap between available
technology and technology
adoption grow smaller.