Don't be Dull: 3 Elements of Innovative Insurers
Even though it's a $1.2 trillion industry in North America alone, insurance has in the past been characterized as slow and predictable. While there have always been pockets of innovation and transformation that ripple through the market, and events and opportunities have summoned insurers and solution providers to action, something different is happening today. The momentum is forceful. The energy is pervasive. There is significant transformation, and innovation is occurring in new and exciting ways. Finally: Insurance is not dull!
SMA is leading the charge to help the industry innovate for greater success. Using a unique approach to analyze industry trends, best practices, and technology investment patterns and levels, SMA gains and contributes new insights into how insurers can make wiser decisions. And then each year, we recognize several insurers and solution providers that are demonstrating real progress in deploying technology for advantage with an SMA Innovation in Action Award. The award winners will be announced at SMA's annual premier event, the 2013 SMA Summit: INNOVATE for ADVANTAGE, a forum where participants can hear about new industry directions and success stories, as well as discover ways to accelerate innovation and transformation in their own organizations.
The award submissions themselves tell an interesting story about progress in transformation and innovation within the industry. Insurers are transforming beyond the basic transaction processing. They are adding capabilities that are helping them attract and win additional business – business that is delivering higher levels of profit. While many of the projects are relatively small in scope, they are leveraging next-generation technologies and having a mega impact on the business itself. There are three themes that emerge again and again among the submission stories. They involve major improvements in speed, significantly enhanced visibility that is enabling better decisions at every level, and accuracy that is improving both top and bottom line results.
As would be expected, given the wide array of achievements, the ingredients for success are not always the same. However, it is apparent that two key relationships are major determinants in shaping a project's path and ultimate rewards. The first is the partnership between business and IT – the alignment of goals and priorities is imperative. The second is the partnership between the insurers and their solution providers. Time spent up front to get this right is very important.
SMA research and the exciting information contained within the award submissions shows that very few insurers are standing still. They are either moving forward or falling backward. There is no middle ground. For some insurers, it is tempting to believe that the business of insurance will not change significantly by 2020 and that product fundamentals, channels, operations, and business models will remain much the same as they are today. The reality is that taking that view may be a grave mistake for insurers that want to survive and thrive in the future. The changes taking place today, and those that are around the corner, are gigantic. The impact will be felt across the board -- in the design and development of the product and services portfolio, the way the business is marketed and acquired, how risks are selected and prices are determined, in what manner contracts are administered and serviced, and how risks are mitigated and managed.
Major players, both large and small, are becoming more aggressive in the pursuit of a competitive edge, using emerging technologies and new solution approaches to assist them. The level of transformation in each organization, and the amount of progress made or not made, is determined by a unique combination of market forces, leadership insight and strategies, and business and technology capabilities. Today, technology decisions and investments have major implications on the degree of success that individual insurers are able to achieve and their ability to compete effectively as the marketplace evolves.
There are three critical elements that all insurers and solution providers should be considering with every investment. One, if not all of these elements, are exhibited in the stories of successful insurers:
At this year's SMA Summit, Smallwood will be joined by technologists from companies including The Hartford, New York Life, and Transamerica to discuss innovation in underwriting, distribution and more. Register today for the event Monday, Sept. 16, at the Mandarin Oriental Boston.
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