Key Tech for Life, Annuity in 2020

Data governance, edge computing, artificial intelligence (AI), machine learning (ML) and blockchain have become much more than buzzwords in the life and annuity industry—they represent areas of innovation being implemented today and examined further for the future. I see four major trends in the life and annuity industry that will continue to be important for insurers as we enter 2020: Simplifying business and technology architecture We’ll see life and annuity organizations continue to modernize their technology platforms over the next 12 months. This is where life and annuities organizations will invest most heavily in 2020 from a technology standpoint. Addressing aging and limiting technology infrastructure will continue to be the highest priority for any large or mid-sized insurance company. Organizations that don’t already have a strategy in place to do so run the risk of disruption. The industry is still hurting because of the nature of the monolithic legacy platforms that are so difficult to change. Aging technology and the aging workforce pose a great risk to insurers, now more than ever before. If these organizations aren’t already focused on this issue, they’re going to be in for a rough road in the coming year. To mitigate the risk, they need to immediately develop a strategy and identify a partner to help them get to the finish line as soon as possible, or they won’t have the agility they need to compete in the future. Improving engagement models End-to-end engagement is becoming increasingly relevant today. Customers, the workforce and distribution partners are all demanding easier and more effective engagement with insurance organizations. To meet these demands, life and annuity insurers will have to work on all engagement models: customer engagement, distribution engagement and employee engagement. Insurers will improve how they work on an enterprise level, gaining efficiencies and boosting productivity. See also: Insurance Innovation’s Growth Challenge   Engagement is really about how both internal and external consumers see and interact with an insurance organization and use its capabilities. The industry now has to deal with meeting customer demands for a level of engagement and interactivity it never needed to provide before. Many companies focus on the design of that engagement, which is very important. However, if that design isn’t coupled with modern architecture that can enable it, insurers will fail because they are merely putting lipstick on a pig. Expanding the use of data In 2020, insurers will see greater value from the data generated by their enterprise. As an industry, we’re still having a hard time understanding and rationalizing our internal and external data. Identifying what our goals are and who truly owns the data is a struggle for many companies. For that reason, data governance becomes pivotal for insurers trying to leverage their data. In many cases, AI and machine learning are becoming more embedded and becoming part of the enterprise infrastructure and framework. In the next year, insurers will start to see more value from these efforts, whether for their advanced underwriting models, their implementation of advanced robotics or capabilities to create straight-through processing as well as self-service. We’ll also start to see some large and innovative insurance organizations develop use cases of blockchain implementation. In the past few years, many technology companies have been working on uses cases around agent on-boarding and claims, for instance. In 2020, we may see some of these use cases get implemented in the industry. Digitizing the enterprise As companies continue to work on new architectures, we’ll see them increasingly leverage “ecosystem” thinking. Many capabilities, such as plug-and-play innovations, will have to come into, and integrate with, the enterprise’s capabilities. That ecosystem thinking can only happen if insurers begin to enable a very modular architecture and an application programming interface (API) infrastructure. In this era of constant technological evolution and abundant innovation, it’s becoming difficult for legacy-minded insurance companies to have enough agility to implement and leverage these new capabilities. They’ll need to embrace innovations as they come and to create a unique, personalized context around the innovations that are relevant for their business models. They’ll have to learn fast, experiment fast and fail fast. All this requires a very open digital architecture enabled by API frameworks and infrastructure. New technologies, new trends Insurance organizations should be familiar with edge computing, which has been a heavy user of content management systems and image and workflow systems that require efficient content delivery and consumption. Edge computing will benefit our industry by efficiently leveraging and dispersing content where and when it’s needed. Insurance is a data- and content-rich industry. As new architectures continue to become mainstream, and with the advent of technologies like 5G and IoT, life and annuity insurers will use them to learn about our customers’ lifestyles, income patterns and more so we can provide more precise, personalized and real-time advice. I see insurers playing with that paradigm in 2020. See also: The Behavioral Science on Buying Insurance   Another paradigm that’s becoming buzzworthy in the industry is around no-code platforms. In reality, there’s no such thing as no-code—even no-code platform requires code. However, when you spend most of your time coding the framework and capabilities but not focusing on business functionality, the level of configurability you drive in these platforms limits the amount of actual physical code that’s required to implement business capabilities. This decreases the cost and time to market while enhancing the quality and reducing technology change-related disruption. This will be a trend that will influence the industry’s digital architecture implementations in the future. At a high level, the life and annuity industry will continue to make progress in 2020 thanks in large part to technological advances. The key is to view what may seem to be common buzzwords not only as trends, but also as technologies and concepts that will push the industry forward.