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The challenges facing insurer IT departments aren’t new, as carrier CIOs continue to be tested by the desire to grow and transform their business with budgets that remain consistent, while simultaneously working to reconcile internal legacy environments. Insurer CIOs are investing not only in new technologies, but also in developing the capacities of their organizations to more efficiently and effectively deliver more and better capabilities. According to a new Novarica study of over 90 insurer CIOs, insurers are working to shift dollars from running the business to growth and transformation initiatives by driving multi-faceted and multi-year IT practice process improvement programs. Carriers are adopting and expanding upon well-known and emerging IT practices, including: Agile development, user experience measurements, and enterprise architecture.
As carriers are looking to find and retain the right resources to manage their legacy environments, they continue to struggle with talent management and IT operations—the two most pressing concerns for CIOs. Legacy environments pose staffing challenges to not only retain resources with skills in maintaining old systems, but also to find employees to replace those who retire and acquire new talent to support emerging technological initiatives. There are technical and cultural challenges alike associated with IT operations; managing complex legacy systems can be a delicate matter, as well as adapting business processes to deliver projects in a quicker, more flexible, and more cost-effective manner.
Carriers in both the life/health/annuity and property/casualty sectors have widely adopted Agile as they look towards expanding IT practices to ensure quick, responsive delivery of internal projects. Additionally, carriers are addressing the challenges of integrating new core systems or new technologies into their technical environments, increasing their focus on enterprise architecture and user experience/human factors engineering to meet internal and external usability expectations.
When IT practices improvement efforts weren’t actively being expanded upon, they held steady, with other top challenges—like costs and budgets, security, and aging legacy environments—remaining consistent from 2017. Integrating IT practices and addressing these issues isn’t a simple, overnight process. Such transformational programs are enterprise-wide initiatives, not just IT initiatives or business initiatives, and the challenges reflect an industry where traditional business practices are coming into conflict with the need to adapt to changing constraints and to quickly deploy new products. The successful use of IT practices necessitates getting buy-in from business partners and then translating the practices and attitudes across the entire organization.
To facilitate communication and confidence, insurer CIOs should consider articulating the value of IT practices in KPIs that are easily understood by other business units. Despite the fact that these metrics may not be what other business units are used to seeing, CIOs can find common ground between the old and the new by articulating the benefits produced by IT practices and disciplines. When the value is more clearly understood by the whole organization, acceptance is easier, and a cultural transformation is more effective, which allows CIOs to build on their past investments in IT practices to position themselves properly for the future.