Gartner has identified the 10 most important technology trends for the life and property and casualty (P&C) insurance industry for this year to help insurers’ IT leaders assess and prioritize critical technology options.
Insurance CIOs need to advise their business peers on the business value and use of new technologies to support critical business priorities such as customer experience, operational efficiency and improved profitability. Expanding their technology competencies will be mandatory for insurance IT leaders developing long-term IT strategies that contribute to their companies’ value propositions and generate additional business.
The technology trends described in this document are presented in no particular order, and the sequence is not intended to imply any prioritization.
1. Legacy Modernization: Legacy modernization initiatives are generally complex, multiyear undertakings that present significant risks of project delays, budget overruns or failure to achieve the desired scope. For this reason, an insurer’s identified risk threshold and project management experience will determine its most suitable legacy modernization approach. The ability to achieve a timely ROI from legacy modernization will depend not only on solution or vendor maturity, but also on internal factors, such as cultural inertia and stakeholder commitment.
2. Cloud Computing: A wider adoption of cloud computing will force insurance CIOs to address security considerations, review the maturity of their existing legacy applications, and reconcile complex, heterogeneous business processes and technology standards. Insurance CIOs will have to combine different cloud deployment options (public, private or community clouds) as part of their cloud computing strategy.
3. Risk Management and Compliance Solutions: Risk management and compliance solution deployments will likely involve software providers that insurance CIOs have not been exposed to in the past. CIOs will need to align internally with their business peers to become acquainted with these providers and assess their delivery capabilities against internal service-level agreements. Data quality issues, such as the lack of common metadata structures, data inconsistencies and poor data governance processes, will present increasing challenges when enterprisewide risk management platforms are implemented.
4. User Experience Technologies: The growing empowerment of the consumer is placing increasing pressure on insurance IT leaders to address behavioral preferences across all touchpoints. The portal is becoming a key touchpoint for insurers, enabling them to deliver intimate, personalized experiences — both sales and e-service — to their distributors and customers. New user experience technologies will allow insurance CIOs to deliver tailored interactions to individuals or groups, replacing mass content delivery.
5. Event-Driven Architectures and Real-Time Operational Intelligence: The use of event-driven architectures and applied customer intelligence will help to enhance customer intimacy; improve customer retention; and increase cross-selling, one-to-one marketing and overall customer satisfaction. Also, Real-time operational intelligence systems that are programmed to respond automatically to address predictable business outcomes are less expensive, faster and more consistent than those that require human intervention.
6. Mobile Applications and Technologies: Mobile devices are rapidly becoming the sales and service platform of choice for consumers and agents. They will increasingly change the sales process, providing agents with new graphics, touchscreen, recording and other capabilities that will enable them to better communicate the value of insurance products.
7. Social and Collaboration Technologies: Social media monitoring tools help insurance IT leaders to improve problem identification so that customer service representatives and agents can intervene before negative publicity is generated. These tools also provide business and IT leaders with new insights into what consumers value in insurance products, help them identity new sales opportunities, and enable them to track buying behaviors that drive sales and service decisions.
8. Sales Force Automation and CRM Tools: IT investment in agent and broker technologies will rise significantly during the next two years as insurers focus on strengthening their channel relationships. Improved sales automation capabilities will help agents reposition their value from simply selling to being more holistic advisors, providing their clients will relevant risk, financial health and savings goals information, even when the agents are not actively selling. Mobile communications, social media, cloud computing and data will become essential components of every business process.
9. Internet of Things: Insurers will look to leverage real-time data from new devices embedded in appliances, equipment, homes, offices, factories, vehicles and other locations. This data will help with marketing, pricing, risk selection and claims. In some cases, they will leverage smartphones for use as sensors.
10. Advanced Analytics and Business Intelligence: Insurance CIOs who have successfully implemented BI and advanced analytics capabilities will support improved decision accuracy and insight into business performance, including actuarial, underwriting and claims efforts. Existing BI and analytics capabilities will increasingly need to incorporate social and unstructured data.