At the twilight of another year, it's always helpful to reflect back and examine the last 12 months. What happened that surprised us? What were we proud of? And what lessons did we learn?
In 2016 our industry went from one that was slow to adopt emerging technologies to one that is well on its way toward digital transformation. With increasing disruption in the form of innovation and new market entrants, we've moved more quickly toward progress than any time in history.
And while this is a notable achievement (especially in the property and casualty insurance space), reports show that there is a real movement for straight-through-processing among all business processes.
In the employee benefits/group insurance space that I work in, insurance companies want to streamline all data. One of the prerequisites is eliminating the re-entry of data. Example: pushing customer relationship management (CRM) data to a rules-based underwriting and rating engine.
Sending the information into illustrations and proposals and then populating an electronic application (e-app) into an enrollment component, wherein the insurer can cross-sell optional voluntary products, is gaining traction. Also on the rise are broker exchange and automated renewal web services that seamlessly move data between claims and policy administration vendors into a sales and underwriting system.
However, many manual processes are still dominant across certain areas of insurance, such as new case on-boarding, platform integration and voluntary product offerings, including critical illness and accident insurance. So there is still much room for automation.
In just one year, carriers have had to mobilize intelligently. They're making strategic decisions that salvage previous investments in IT and equip present ones for growth. Taking large strides toward innovation and the Internet of Things gives insurers the inevitable benefits of this shift more quickly, too.
Big data, analytics and cloud technology are disruptive forces that are spurring industry growth and new insurance products. (Photo: Thinkstock.)
5 key priorities
Goals drive action. Celent's "Life/Health Insurance CIO Pressures and Priorities 2016: North American Edition" report outlined the following as some of the top business goals influencing CIO's of mid and large sized carriers in 2016:
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Growth and retention
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Process optimization
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Regulatory requirements
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Innovation
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Cost reduction
Related: 5 things you need to know about the future of life insurance
Charged with finding the right solutions to realize these goals, IT departments have had important investment decisions to make. Not just for solutions that help achieve objectives today, but also ones that ensure mid-term and long-term success as well.
Adapting to disruptive technology
Insurtech is now a fully fledged stream of fintech with $1 billion of venture capital invested in 47 deals in the first half of 2016, Life Insurance International revealed. That's great news for insurers. Contrary to what some others experts think, I believe insurtech to be more complementary to insurers, as opposed to competition.
Modernization of core legacy systems, new insurance exchanges and changing business models (platform and peer-to-peer) defined the year. They will continue to do so as carriers adopt digital strategies.
Blockchain cryptocurrencies (Bitcoin), artificial intelligence (AI and chat bots), and sensor technology (wearables and autonomous cars) are taking hold in insurance and providing ample opportunity for disruption. The internet of things (IoT), the foundation for many emerging technologies, has irrevocably changed the way companies and consumers communicate. These trends are accelerating.
Big data, analytics and cloud technology are all part of the mix as well. Juggling the onslaught of new innovation and understanding how it can be used to create a competitive edge (quickly) can be disconcerting. However, these disruptive forces should be seen as the catalyst necessary for the kind of dramatic change required to spur growth and new insurance products.
