Sometimes, finding the answer in confusing times is really a matter of knowing the right questions to ask. For example, the Novarica Nine Insurance and Technology Trends for 2018 and Beyond looks at three groups of three key issues:
- External trends, like disaggregation of value, the insurtech bubble and drive for innovation leveraging emerging technology.
- Technology capabilities in data and analytics, digital channels and core systems
- IT management issues like security, talent and alignment and governance
In each of these nine areas, planning a successful strategy starts with asking the right questions. Some questions I encourage our insurer clients to ask themselves are:
What is our distinctive value to this stakeholder in transferring risk from individuals and businesses to the capital markets? (Disaggregation)
We’ve long talked about disintermediation of distributors, but, in the current environment, any intermediary between those looking to buy coverage and those looking to take risk are intermediaries. Insurers and reinsurers, as well as distributors, need to make sure they they’re providing a unique, differentiated value to justify their position in the value chain.
See also: Predictions From 6 Insurtech Leaders
What's different about our approach to the problem? (Insurtech)
There are many different opportunities to engage with insurtechs, but the most interesting thing carriers can learn from new market entrants is, what’s different about their approach? As the Zen saying goes, in the beginner’s mind, there are many possibilities. In the expert’s mind, there are very few. New entrants into the market can help insurers avoid overlooking new ways to solve customer problems.
What would this enable us to do? (Innovation and Emerging Tech)
Emerging technology is full of possibilities, from AI to RPA to IoT to drones. The important question is, what could we do if we had access to this technology and its capability? Could we price better? Gather information faster? Create better customer experience? Framing the right question can drive better strategies for exploring innovation and emerging technology.
If we knew, what would we do? (Data and Analytics)
Everyone wants more data and insights, but few have a plan to act on those insights. Without an idea of what could be done better if more insights were available, and a plan for how to do that, insights are worthless.
How could this be easier and faster? (Digital)
Insurers have different definitions of digital strategy, but it really all boils down to this question – how could this be easier and faster? Better UX? More pre-fill? More predictive analytics? Simplified products? Simplified processes? Yes to all. And then do it again.
How will this create a foundation for evolution? (Core)
Core systems are still the ultimate foundation for speed to market and ease of doing business, and are critical in enabling analytics and insights. Insurers should consider whether their core systems are really up to the challenge of creating a foundation for evolution in product and process, or whether they will be an anchor to the past.
What is our realistic goal? (Security)
Perfect security is attainable – unplug the internet and all terminals and lock the server in a dark room. Becausse that’s not realistic, insurers should do a realistic assessment of risks, costs and impact on business effectiveness.
Why should anyone work here? (Talent)
This is a challenging question to face. Insurers talk a lot about talent availability, but they talk less about what’s compelling about the opportunity to work for their companies. Is the pay stellar? Is the environment stimulating? Does the role have an opportunity to create an impact? If not, your problem may not be the supply of talent.
See also: Where Are All Our Thought Leaders?
How does this IT capability drive business results? (Alignment)
IT leaders often have a hard time translating the capabilities they enable into business results. But how can anyone expect business executives to invest in something they don’t understand the value of? Not being able to draw a line between tech capabilities and business results is fatal. Communication and understanding are critical skills for IT leaders.
Insurers really need to examine whether they are providing a distinctive value and a positive experience in every area both internal and external. Some of these questions are not comfortable to ask, or to answer. But having a realistic set of answers is the first step in developing an effective strategic plan.
