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How are P&C Commercial Insurers Progressing with Their Strategic Initiatives in 2022?

New SMA Blog by Mark Breading, Partner, Strategy Meets Action

When the pandemic hit in 2020, many property and casualty commercial insurers had to pause, stabilize, and reprioritize their digital transformation plans amid lower business volumes, economic lockdowns, and an uncertain financial environment. But that all changed in 2021 as commercial insurers pressed the pedal to the metal to accelerate their digital transformation journeys. Now, a new study from SMA indicates that commercial insurers will continue to advance with their transformation strategies in 2022. However, their focus will look a little different than it did a year ago.

SMA’s recent research report, “2022 Strategic Initiatives: P&C Commercial Lines,” features market insights from an annual survey of insurance executives about the state of their strategic plans. Over the past two years, the insurance industry has shifted its priorities in response to changing consumer demands, altered business patterns, and the ongoing workforce revolution. This year, 100% of commercial lines carriers are at some stage in their digital transformations. But, as insurers move past the plans implemented during COVID-19, many realize that they are not as far along in their transformations as they initially believed, and there is still a significant opportunity to transform their businesses.

When looking at differences between insurers focused on small commercial versus mid/large commercial lines, there is significant variance in the business drivers pushing technology investments forward in 2022. In the small commercial segment, growing existing lines, markets, and geographies is the number one driver this year. As InsurTechs and new entrants increase market competition, small commercial insurers are more likely to focus on growth than their mid-market/large commercial peers. Increased competition is also why more than half of small commercial insurers are also focusing on cost containment.

On the other hand, most mid-market/large commercial insurers are aiming for business optimization and transformation with their technology investments to reduce complex manual processes. Currently, there is a wealth of opportunity for them to automate operations and leverage insights for greater efficiency.

What is clear in 2022 is that commercial insurers seem to have solid roadmaps for their digital transformation, even if many are still within the early phases. As the year unfolds, technology investments will be necessary to build a platform for innovation and growth. Rethinking talent strategies will also be critical now that employees’ expectations have forever changed due to the pandemic. A major change is underway, driven by key strategic initiatives evolving traditional and transformational aspects of the business, and insurers will need to be bold and embrace change to be successful in 2022 and beyond.

For more information on specific strategic initiatives of commercial lines insurers, including the strategies of the small commercial and mid/large markets, read SMA’s recently published research report, “2022 Strategic Initiatives: P&C Commercial Lines.”

About The Author

Mark Breading 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 methodologies, fresh ideas, creative conceptualizations, and ability to incorporate InsurTech and transformational tech in business strategies are unparalleled. He also leads SMA’s research program, publishing 25-30 research reports per year and conducting various custom research projects for insurer and vendor clients. His thought leadership in the areas of InsurTech, transformational technologies, customer experience, and digital strategies has earned him a ranking of one of the “Top Global Influencers in InsurTech” by InsurTech News and Onalytica and a place in the ten finalists for the “Top Global IoT in Insurance Influencer Award.”

Before joining SMA in 2009, Mark spent 25 years with IBM in roles including the Global Insurance Strategist and Director of Global Financial Services Executive Conferences in addition to leadership roles in consulting and marketing. Mark 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.

About SMA, a ReSource Pro company

Strategy Meets Action is an industry-leading strategic advisory firm delivering strategic insights, consulting services, and published research to carriers, solution providers, and InsurTech startups. The firm provides insights and guidance on business strategy, digital transformation, core systems and customer experience. Learn more about SMA at www.strategymeetsaction.com.

SOURCE: Strategy Meets Action (SMA)

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