Product innovation, predictive analytics, cyber-security and digital distribution could bring about the biggest changes for insurers in 2017, predicts Novarica
Boston, MA (Dec. 7, 2016) – While most of the insurance industry admits the potential for real change to occur in the industry, few expect it in the short-term. Nonetheless, Novarica, in its latest executive brief, Five Potential Changes in 2017 for Insurance, details how some insurers do see the demand for different product types, the impact of predictive analytics, and the threat of digital competition and cyber-security as areas where real change is likely in 2017, and the steps insurers are taking to prepare.
“If one compares the rhetoric of most senior executives in insurance and the strategic plans of their companies, it’s clear that they are expecting significant changes in the next 10 years or so, but that the next 12 months will look a lot like the last 12. At the same time, there is a widely accepted risk of significant change within the coming year,” said Matthew Josefowicz, President and CEO of Novarica, and co-author of the brief. “Bill Gates famously wrote in 1996, ‘We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten.’ But the insurance industry may be flipping this dictum on its head.”
Among the key findings of the report are:
- Real change may come from long evolutionary trends. The growth of predictive analytics, simplified products and underwriting, and digital distribution are nothing new. But they’re all starting to reach critical mass at the same time.
- External threats like cyber-security and the potential of regulatory action are what the industry might consider “known unknowns.” Insurers generally feel that their ongoing efforts in both areas will allow them to manage any real change that may occur.
- While fewer than one in five insurance leaders really expect major changes, more than half admit the possibility of it. This uncertainty requires insurers to actively monitor the horizon and be prepared for changes that may not occur in the short-term, while still devoting resources to addressing real short-term needs.
Novarica helps more than 80 insurers make better decisions about technology projects and strategy through retained advisory services, published research, and strategy consulting. Its clients include more than 80 property/casualty and life/annuity insurers. Its knowledge base covers trends, benchmarks, best practices, case studies, and vendor solutions. Leveraging the expertise of its senior team and of more than 300 CIO Research Council members, Novarica provides clients with the ability to make faster, better, more informed decisions. Its consulting services focus on vendor selection, custom benchmarking, project assurance, and IT strategy. For more information, visit novarica.com.