Since 2020, there have been endless discussions around COVID-19’s impact on customers’ needs and how the insurance industry adapted swiftly to unprecedented times. Although the pandemic helped accelerate innovation in some areas, many commercial lines insurers came to realize how unprepared they were for the digital demands resulting from the global crisis. In fact, a recent SMA survey found that fewer insurers consider themselves to be in transformation mode today compared with in the pre-pandemic era. So, it is no surprise that, in 2022, many senior executives across commercial lines see how imperative it is to transform and innovate, and a sense of urgency is driving a frenzy of new activity.
SMA’s newly released research report, “Digital Transformation in Commercial Lines: Project Priorities for 2022 and Beyond,” identifies specific project plans for insurers in small commercial lines and mid/large commercial lines this year. Across all lines in the commercial market, insurers are focusing on operational transformation and the technologies needed to enhance data and analytics capabilities in different business areas. There is also more significant activity in initiatives to improve digital interactions with agents and policyholders. However, unique project priorities emerge when looking separately at insurers in small commercial versus mid/large commercial lines.
Within small commercial, SMA’s research finds that insurers are further along in their digital transformation journeys than their peers in mid/large commercial lines. Specifically, small commercial insurers are increasing their investments in straight-through processing (STP). For insurers serving the mid/large commercial segment, modernizing core systems and eliminating manual processes are their top two project areas in 2022. Advancements in these areas will be essential for insurers handling complex and specialized risks that involve vast amounts of forms, documents and data.
See also: Emerging Tech in Commercial Lines
Insurers’ plans in 2022 will only continue in the years to come, and it will be become ever-more critical in a competitive industry environment. Upgrading digital capabilities to serve agents, policyholders, employees, members and shareholders will be hallmark traits of future market leaders engaged in their digital transformation journeys today.