(Image credit: Dollar Photo Club.)
For large P&C insurers, “change” is the word of the day. The CIOs and other IT executives in attendance at a recent Novarica special interest group meeting were eager to discuss how change was affecting both their IT organizations and their businesses as a whole–including changing demographics, changing regulations, and, of course, changing technology.
As Baby Boomers are retiring and Millennials will make up a majority of the workforce in the coming years, changing demographics are affecting insurers on all fronts. With many agents retiring, insurers must figure out how to attract and retain new talent, despite the next generation’s different workplace expectations and priorities. Carriers are also grappling with the shifting demographics of their in-house expertise, from underwriters and IT business analysts to customer service representatives. Finally, an increasingly Millennial customer base brings new challenges, from user experience expectations (think self-service capabilities) to different product needs (e.g., renter’s vs. homeowner’s insurance).
Adapting to Changing Regulations
While regulatory changes have been slow-moving in many cases, the participating insurer CIOs were still keenly aware of the need to adapt to changing laws and regulations. From harsher consequences for data security breaches to updated privacy protections for individuals, insurers are eager to maintain compliance in the face of a shifting regulatory landscape. The future of regulation can be difficult to predict, however: IT executives are watching closely for an “Uber of insurance” to emerge, to make sure they can adapt to any quick-changing laws in its wake.
Finally, changing technology continues to have a huge impact on both insurers’ current IT initiatives and future IT strategies. Insurers are realizing ever-greater competitive advantages through the use of data analytics and business intelligence tools, and CIOs are working closely with other business executives to build out organization-wide data strategies. Advances in telematics and remote imaging capabilities (from drones to satellites) will enable insurers to evaluate risks at never-before-seen levels of precision. At the same time, enhancements in search and social media present new opportunities and challenges for sales and marketing, both direct to customers (Google) and between agents and underwriters (EvoSure).
One of the biggest challenges facing insurer CIOs today is figuring out how to deliver their business model in a digital context. Our participants agreed that investing in core digital capabilities now enables carriers to take advantage of the advancing digital infrastructure over time. Forward-looking, “futuristic” projections may not yet affect the day-to-day work of an insurer’s IT organization, but it’s essential to build an IT roadmap and to prepare the organization’s technical infrastructure for the changes to come.