Read about unique insights and market trends in insurance.
We asked Sean Sweeney, Centric Boston’s Insurance Practice Lead, to tell us about some of the market changes he’s seen and share advice on how businesses can prepare and respond to these changes.
Here’s what he had to say:
Question #1 – What are some market changes you’ve seen recently that businesses in the insurance industry should take into account during the operational planning season?
Most carriers are either planning for, in the process of or have just completed modernizing some or all of their core legacy systems. It’s an onerous task and can preempt other innovative projects.
These transformational projects are needed, but the challenge is the following: How do you continue to innovate and add value while undertaking these large legacy system replacements?
Carriers that are able to deliver on contemporary systems, while still making it a priority to innovate and differentiate themselves will be the most successful. In my experience, companies that are able to do both concurrently – in an efficient, strategic manner – are able to drive the most value from this transformation.
For the past few years, carriers have been focused on legacy system replacements. Many carriers are continuing to modernize and update their core processing systems with three and five-year plans. But a shift is expected soon.
Over the next two-to-three years, many will complete the delivery of high-performing systems and free up resources to focus on implementing new technology and new business models.
Speaking of new business models, the convergence of technology advancements in the insurance industry has resulted in InsurTech – where many carriers are experimenting with new business models, sometimes creating new company off-shoots. Existing carriers are looking to hedge their bets on the new technology world so they’re not left behind.
Question #2 – Based on your industry experience and evaluation of the market, what are some additional changes you predict or foresee taking place in the coming months to a year?
Carriers will turn to optimizing their investments in newly installed contemporary platforms. Once relative parity is achieved, they will look to ‘tune their operational engines’ for peak performance, driving out inefficiencies.
There will be even more pressure on innovation and driving efficiencies out of technology such as workflows while using data to inform the business and tweak their offerings.
Carriers will look to invest in digital technology for agents and consumers, enabling new self-service offerings. Once their core systems are updated, carriers will see new opportunities to improve their technological capabilities.
Question #3 – What tips or guidance can you provide business leaders to help them prepare or respond to these market changes?
A critical role and responsibility of technology leaders is to drive business partners to prioritize improvements by educating them on market changes and conditions. This includes shining a light on what competitors are doing and starting “what if?” discussions.
Additionally, there is a need to evaluate, assess and respond to disruptive models that keep emerging to appropriately advise senior management.
Question #4 – Why is it important for business leaders to start thinking about this now?
Often leaders can be focused on the short-term, but they need to be thinking three and five years down the road. How do they do this?
By developing a business and technology road map, businesses will be able to compete today and tomorrow.
There is no such thing as resting on your laurels anymore, continual improvement and evolution is ‘de rigueur.’