A recent report from analyst firm SMA provides an update on business and technology imperatives that insurers are addressing in order to grow and compete. The fifth annual report – SMA Top 10 Imperatives for Insurers, 2014 – notes that the priority levels of various items have changed as the thinking in the industry has matured, and varies according to the strategic direction of the specific organization.
We had the opportunity to talk to Mark Breading, partner at SMA and one of the report’s authors, about the report and its conclusions. Mark shared insights on what’s rising in importance and what elements are taking a back seat. We also got one of the best operational definition of a tricky term – “Innovation”.
As we start with a somewhat clean slate for 2014, we’d be interested in your comments about the implications of the report for the industry and for you.
Of the 10 imperatives identified in the report, SMA identifies four as forming ‘the cornerstone for transformation’:
- Embrace CORE Transformation Power. As insurers modernize core systems, SMA says that insurers can see “innovation evolve from an interesting concept and experiment to become central to many insurers’ plans for transforming their products, processes, and IT platforms.” In other words, modern technology is now necessary, not just desirable.
- Capitalize on CUSTOMER EXPERIENCE. SMA finds that leading insurers “recognize that improving the customer/agent experience has broad implications in terms of technologies, processes, products, and culture.” According to the authors, most insurers are have started the journey. The key to success is to change the view from “from inside out to outside in.”
- Achieve PRODUCT Advantage through CONFIGURATION. Product creation alone is not sufficient. Insurers must be able to design, deploy, and monitor the products easily and continuously. SMA advises that use of advanced systems and technologies is providing critical advantage in the market.
- Leverage NEXT-GEN Technologies. SMA notes the value and priority of next generation technologies has shifted. Insurers need to be aware of the advantage of various technologies at specific points in time (more on this below). This surrounds all of the other imperatives, suggesting it crosses boundaries.
Is Social Trending Down?
The report notes that some technologies that were considered imperatives a few years ago are now subsumed into other categories. One is Social Media. In past, social skills were considered an imperative. Now it is seen a part of a larger collaboration requirement. According to Breading, social is still important, but added “We don’t see insurers making big investments in social media as standalone projects, aside from the large insurers that are using social for advertising and branding.”
More critical is the bigger picture. “We believe insurers should be evaluating the entire set of technologies available to enable collaboration, and considering those in the context of specific business situations,” Breading advises. And this has larger implications, according to Breading: “insurance practitioners should be well versed in a variety of online capabilities that provide the ability to network, find subject matter experts, exchange information, and tap into the power of the crowd.“
At the Core
At the core of the SMA model is the last imperative: INNOVATE to become a NEX-GEN Insurer. As we’ve noted in the past, we get the feeling that ‘Innovation’ is becoming a buzzword with ;ittle real meaning, so we asked Breading about this. We were pleasantly surprised that there was a specific definition, and a call to action as a result.
The SMA definition:
INNOVATION is the continual rethinking, reinventing, reimagining, or retooling of products, services, and processes for the purpose of transforming customer and employee experiences and achieving game-changing results.
And the call to action:
INNOVATION comes from a desire and a commitment to constantly improve, to think differently, and to envision and enact change.
What do you think?
We think there’s lots of food for thought here. And we’re pleased to note that Mark Breading has agreed to be part of the faculty at the Insurance-Canada.ca Technology Conference 2014 in March.
Meantime, what do you think about the imperatives? Do these reflect your view of priorities? And the definition of Innovation… How does that sit with you?