has many areas where interactions with all of these new
technologies can be highly beneficial. Insurers need to
think about how their current technology environments
stack up to these developments and what needs to happen
to put them to use.
Every organization must prepare to meet the challenges and
seize the opportunities arising in each of these areas. Building a
strategy that encompasses all three is critical for success in the
new digital future of insurance.
How We Get There
To help insurers clarify their preparations in these areas, SMA
has introduced the Seven Bridges model. Each bridge illustrates
initiatives along defined pathways that insurers can use to
ground their transformation strategies.
Major in Data and Analytics. Data is the currency of the digital economy. Insurers have a strong understanding of the power
of data already in their business, but the exponential expansion of
the quantity, speed, and sources of data is a challenge for even the
most technically savvy of companies.
Every insurer needs an enterprise strategy to leverage new
and existing data assets and to employ business intelligence and
analytics to gain new insights. At a minimum, the strategy should
include master data management with a strong BI foundation.
However, the minimum standards will not last long as insurers
embrace big data, predictive analytics, machine learning, and
other emerging technologies. This is the number-one priority
for insurers in every segment and size, based on SMA research.
Those who are not putting significant resources into embracing
advanced analytics and preparing to incorporate ever-increasing
amounts of data will find increasing challenges to catch up.
Keep a Pulse on Emerging Trends and Technologies.
Technology innovation is a driving force in insurance, as in
the economy at large. Whether we are talking about insurtech,
emerging technologies, or whatever new technology might arise
in the future, technology is now an elemental part of the insurance transaction. It is critical to determine which technologies
offer the best potential advantages for your company—and then
track, invest, and experiment.
Go Digital. Nearly every insurer has some level of digital
capability, but there are far fewer that we would term “digital
insurers.” For many, digital execution has stayed at a task level:
electronic documents in personal lines, for example, or an app for
FNOL in claims. The “go digital” bridge is about developing an
enterprise-level digital strategy that transcends product and risk.
What is not digital today is going to become digital. Tasks that
cannot be made completely digital, like claims inspections, are
going to be augmented by technology to a degree that is difficult
to imagine today.
Operationalize Customer-Centric Strategies. While there
is widespread understanding that customer-centric strategies are
critical, operationalizing customer-centric outcomes is a work in
progress for many insurers. Improving the customer experience
is essential as customers’ expectations change as they, too, feel the
effects of the digital revolution. Insurers’ focus needs to be on the
personalization of the customer experience from initial engage-
ment through the ongoing service involvement.
Core Systems Modernization/Replacement. Modern rating,
policy administration, billing, and claims technologies form
the hub for innovation and transformation. Legacy technology
stands in the way of implementing new strategies and improved
Most insurers have made at least some move toward core
modernization, but what they require from their core systems is
guaranteed to change as we move further into the digital future
with the new products and services that are already emerging.
They will need strategies to ensure that their modern systems do
not become another generation of legacy systems.
Build a Flexible Organization and Workforce. Capitalizing
on emerging trends, new business models, and technologies that
continue to morph almost daily requires a flexible organization.
This not only means a flexible technology infrastructure, but even
more importantly, a culture and organizational structure that can
embrace new roles and new ideas. Innovation cannot exist within
This particular bridge is not an easy one for insurers to build.
Anything having to do with corporate culture, work patterns,
and infrastructure is a struggle. But it’s extremely important—
not only for its own sake, but as a foundation for all of the other
Institutionalize Innovation. Innovation is a requirement
in today’s highly competitive insurance world. Institutionalizing
innovation takes strong executive leadership to lay the foundation
for a culture that is open to experimentation, setting the tone
that innovation is critical to foster the new thinking needed to be
competitive in the future.
The Time for Change Is Now
Understanding the necessity of change is only the first step.
Determining how to successfully execute on the strategic initiatives that will achieve that change is more complex. The Seven
Bridges model can help guide insurers toward the changes they
seek in their people, processes, and technology.
Not every bridge will have the same significance for every
insurer, and every company is starting in a different place
based on their existing organizational capabilities. The pace of
change is just incredible and is pushing us to respond faster. The
convergence between our current states and our future state is
happening within every company and is reshaping our industry.
It is critical for all to create their “bridge” for the future to connect our people, processes, and technology to the future state of
Karen Furtado is a partner with Strategy Meets Action. She
can be reached at email@example.com