New SMA Blog by Mark Breading, Partner, Strategy Meets Action
Boston, MA (Feb. 14, 2019) – Transformation in the property/casualty personal lines segment has been underway for some time as insurers position for success in the digital age. SMA has been tracking and supporting this transformation over the last decade and now observes an important shift in strategy. For some time, insurers have been focused on what we call foundational strategic initiatives, such as core transformation, business intelligence, new product innovation, and workforce restructuring. These areas remain vital going forward and do, in fact, form the base for bolder and more innovative strategies in the future. Now the emphasis is shifting toward transformational strategic initiatives, aimed at adapting to rapidly evolving external forces and rethinking even the fundamentals of the insurance business. Examples of transformational initiatives include comprehensive digital transformation strategies, customer experience initiatives, exploring new business models, and investing and partnering in InsurTech startups and emerging technologies.
What is very important to grasp are the interdependencies of these strategic initiatives, especially between the foundational and transformational initiatives. For example, an assessment of core systems reveals that today’s policy, billing, and claims systems will continue to evolve and be enabled by capabilities from the transformational initiatives that are now underway. The core systems will continue to be enhanced to support digital transactions. Emerging technologies such as artificial intelligence will have a significant impact on core systems. Core systems will also require the ability to interact with advanced user interfaces, new payment technologies, and support IoT-based solutions.
The restructuring of the workforce is ongoing as more workers transition to remote worker situations, millennials join the workforce in droves, and seasoned professionals retire in record numbers. It has become increasingly important to consider how the transformational strategic initiatives are factoring into workforce planning. For example, new roles are being created as a result of the attention and activity related to improving the customer experience, the mandate to become more digital, and the expertise required for big data/analytics undertakings. AI is also a hot topic in planning for the workforce of the future. Automation and AI will increasingly assume the tasks of some workers today, transform the roles of others, and create brand new jobs that must be accounted for.
In addition to the interdependencies among strategic initiatives, it is useful to understand the level and nature of activities in specific areas. For example, a remarkable 97% of P&C personal lines insurers say they are exploring new business models, although the majority are in the earlier stages of this exploration. Also, areas such as digital transformation and customer experience are dominating the conversation in the industry and the research confirms the high level of activity in these areas.
The full picture demonstrates that P&C personal lines are hitting mid-stride in the transformation journey, with plans to accelerate execution as they shift toward the true transformational types of initiatives. It is indeed a time for strong leadership and aggressive strategies, leading to an industry that is bound to look quite different in five to ten years.
SMA’s research report, 2019 Strategic Initiatives: P&C Personal Lines, provides details on 13 strategic initiatives and where insurers are in their journeys for each one (for example what percentage of insurers have no plans, are developing their strategies, are in initial implementations, or in broad deployment). Insurer approaches to InsurTech and Emerging Tech are also discussed, based on an SMA survey and observations.
About the Author
Mark Breading, a Partner at Strategy Meets Action, is known for his insights on the future of the insurance industry and innovative uses of technology. Mark consults with insurers and technology companies on forward thinking strategies for success in the digital age. His inventive methods and his ability to incorporate InsurTech and emerging tech into business strategies are unparalleled. Mark also leads SMA’s research program, has overseen the publication of over one hundred research reports, and directed custom research projects for insurer and tech clients. His thought leadership in the areas of InsurTech, emerging technologies, customer experience, and digital strategies has earned him rankings as a “Top Global Influencers in InsurTech” by InsurTech News and Onalytica and a place in the 10 finalists for the “Top Global IoT in Insurance Influencer Award.”
Before joining SMA in 2009, Mark spent 25 years with IBM, where he co-developed IBM’s Account Based Marketing program and led the global project office to implement ABM across all industry verticals worldwide. Mark has held both technical and business roles in sales, consulting, marketing, and business strategy and has advised insurers around the world for almost 30 years.
He is a frequent speaker at industry events; an InsurTech mentor with the Global Insurance Accelerator; and a frequent contributor of articles to Insurance Thought Leadership, Insurance Networking News, LOMA Resource, and many other industry publications.
Exclusively serving the insurance industry, Strategy Meets Action (SMA) is an advisory services firm offering retainers, research, consulting, events, and innovation offerings to both insurance companies and solution providers. Learn more about SMA at www.strategymeetsaction.com.
SOURCE: Strategy Meets Action (SMA)Tags: Mark Breading, personal lines, Strategic Initiatives, Strategy Meets Action (SMA), Transformation