There are six major ways that insurers are gearing up to prepare for the challenges and bridge to tomorrow.
Change is constant; we all know that. External forces are conjoining with emerging technologies and changing our whole world, including the business of insurance. And changes bring challenges. How insurers face these challenges and bridge their current world to the future is the key to success.
Our perceptions of change vary. For some, it feels like the pace is accelerating beyond comprehension, and keeping up may feel like an insurmountable challenge. Sometimes, it may seem almost impossible to fathom. As you walk into work today or attend a meeting, the business itself may feel the same on the surface. They’re the same people and similar processes. It appears to be business as usual … but is it?
What we at SMA know is that, just below the surface, insurers are working hard to respond to external changes in a variety of ways and to transform their businesses in response to these external stimuli. We have observed patterns of change adoption in insurance that, at times, may seem very scattered, unstructured and, depending on the size of the insurer, very erratic. Insurance is embracing innovation; it is really happening. It’s still difficult to apply absolutes and see consistent patterns. But the data is there to gather.
See also: 100 Ideas That Changed Insurance
No one has a crystal ball to predict the pace or time frame for these developments. But one thing is clear: Even now, the insurance industry is starting to see the implications of emerging technologies, and there is likely to be significant change over the next several years.
Many insurers recognize this and are working to position their companies to be more agile and responsive. At the same time, insurers have complex operations, organizations and products that require intense focus every day. Managing operations and improving competitive position are challenging enough even before considering the ways that emerging technologies will transform insurance.
So, how are insurers responding? SMA has been tracking six major ways that insurers are gearing up to prepare for the challenges and bridge to tomorrow:
- Establishing venture capital arms to actively invest in startups – focused on new technology solutions, new agent/broker firms and even insurance company startups. The focus is within the insurtech and fintech spaces.
- Creating new partnerships with global companies such as Facebook and LinkedIn, and global technology companies like Google, Microsoft and even IBM. These partnerships are also expanding into auto and other industries as the digitally connected world matures.
- Developing new roles to match the digitized world and capabilities – like digital officer, customer experience officer and chief data scientist. These new roles are attracting new talent and also motivating seasoned insurers to develop new skills.
- Embarking on on new strategic initiatives like digital transformation, customer experience and even big data analytics. These initiatives are a result of the outside pressure from the digitally connected world, the changing customer experience and the advancement of analytics and data sources.
- Creating innovation labs within their businesses and outside the operations, encouraging a culture of innovation. These innovation labs promote ideas from within and are transforming the way in which individuals work and are rewarded.
- Transforming their core operations – underwriting, billing and claims with core systems, initiatives that establish a platform for modernization, optimization and innovation.
At SMA, we focus on what all of this means for insurance, when the impacts are likely to be felt and how insurers can become Next-Gen Insurers positioned for success in the future.
See also: The 4 Major Sources of Change for Insurance
Bridging the traditions of insurance with new technological innovations and transformations is essential for success, as well as being a major focus of the SMA Summit
this September. Insurers large and small are all facing this transformative time in different ways, and some of them will be sharing their experiences and insights at the Summit.
Step one is identifying what insurers face and knowing that the time to act is now. Step two is determining “the hows.” How to build the bridge between today and the future. How to take action. How to ensure that you are competitive in today’s world. I’ll address those steps in the next blog: Bridging Today to Tomorrow, Part 2.