The role of the insurance CIO today requires a unique blend of business acumen, technology awareness and general management experience. Over the years, we have seen the CIO's responsibilities evolve from technology implementation to a greater focus on business and IT strategy. Some may think it has been a rocky ride for CIOs over the past decade; buckle your seat belts -- the next decade may prove to be even more tumultuous.
We are living in a dynamic world that is being shaped by dramatic developments in demographics, economics, politics and technology. When combined with advances taking place across the entire scientific spectrum -- in biotechnology, nanotechnology, quantum physics and medicine, for example -- the possibilities are bounded only by the limits of human imagination. The implications for insurers are profound.
The position of CIO emerged as the use of information in digital form increased. The recognition of the value of information as a critical asset created the need for management -- hence, a Chief Information Officer. In addition to the seemingly endless increase in information, other technology trends will play a vital role in shaping the future of the insurance business and the role of the CIO -- the "Internet of Things," interaction, IT sourcing and insight.
Trillions of things are connecting to the Internet. Sensors, RFID tags, actuators and other miniature devices are being attached, implanted or built into everything -- from cars to cows, packages to pets, and railroads to rivers -- all having profound implications for insurers. This ongoing explosion of devices creates new ways for individuals and businesses to interact, enables new opportunities for sales and service, and increases expectations from customers. Novel approaches will be needed and business models will change, resulting in a paradigm shift in how IT solutions are developed, managed and delivered.
Because of the way key technology trends are impacting the business, both the technology platform and the role of the CIO in insurance will continually evolve. Innovative approaches to products, channels and service will be possible. However, one more trend may trump them all: insight. Winning in the next decade will be determined by the ability to continually derive new insights by unleashing the power of sophisticated analytic engines and applying them to the massive amounts of information streaming into the enterprise. The ability to identify new risks, new markets, new ways to package and deliver products, and new ways to price and manage risk will be the determinant of success in 2020.
For the insurance CIO, these trends, challenges and opportunities may seem daunting. Over the next decade, CIOs will face a formidable challenge in making sure their organizations are positioned to capitalize on the explosion of information, all the new ways to interact, the hyper-connected world and the host of options for sourcing IT services. Successful CIOs will be those who begin to think of their role more as the "Chief Insight Officer" than the Chief Information Officer.
Ultimately, the real challenge will be the ability to drive new insights to more effectively guide the business strategy and deliver competitive advantage. This innovative CIO will play a vital role in helping insurers drive the business with insights -- not just information.
This article is based on recent SMA research: "Insight on the Future of Insurance: Looking Through the Long Lens." www.strategymeetsaction.com/our-research