قالب وردپرس درنا توس
Home / Insurance / The pressure from challenges increases insurers' motivation to innovate

The pressure from challenges increases insurers' motivation to innovate

For those of you who love music like me, you will hopefully agree that one of the best songs from the rock band Queen was "Under Pressure", co-written by the famous David Bowie. The story is that the collaboration was creatively different because the song was constructed in a very new way in one night, where they all contributed different parts of the song musically and vocally and then put it together to create what is considered one of the biggest hits [19659002] While I love music, the title is a reflection of what companies are increasingly facing … print. And it is how they respond and what they do that often redefines their future.

There are all kinds of examples of "pressure cookers" that drive innovation and they show how forward-thinking organizations solve problems with quick planning and prioritization.

Take for example Instant Pot. When Robert Wang considered development for Instant Pot, his background in software gave him a model for rapid development and for rapid technical iterations that would perfect the technology quickly. According to an interview with Wang, Instant Pot adopted "continuous innovation and a highly disciplined product launch cycle (1

2-18 months), more typical of software development than consumer goods." [ii] Wang had the foresight to integrate the fixed timelines with aggressive feedback from customers. This would put pressure on the company to innovate and stay ahead of the competition.

Then think of GM. In September 2020, California Governor Gavin Newsom issued an executive order, "which required the sale of all new passenger vehicles (in the state) to be emission-free by 2035." [iii] Whether it was a coincidence or not, GM announced on January 28, 2021 that "GM would phase out oil-powered cars and trucks and only sell vehicles that have zero emissions from 2035." [iv] So … a timeline has been set. The race is in progress. These two announcements will quickly disrupt an industry, reinvent supply chains and even affect insurance.

And finally, COVID-19. It has accelerated the need for digital transformation while sending a warning signal to insurers, "Be prepared and ready to adapt to anything." In the December 26 article in the Wall Street Journal, “Covid-19 Running Businesses for the Future. Ready or Not, ”Loren Padelford, vice president of Shopify Inc., summed up the pressure with this comparison.

"Covid has acted as a time machine: it brought 2030 to 2020. All these trends, where organizations thought they had more time, accelerated rapidly. " [v]

Changes that may normally have taken years developed over months and shifts that began as temporary corrections are likely to become permanent. The 2020 disruption creates significant opportunities for the insurance industry to accelerate its digital transformation, from new customer experiences to new products and services, channels and business models … if we embrace the disruption.

COVID-19 has all the elements of the pressure cooker environment that require foresight, innovation and prioritization. When it comes to the insurance industry, conversion to a digital insurance model is an absolute necessity.

Last week, Majesco released its latest thought-leadership report, Strategic Priorities 2021. The report marks our 6th annual survey of insurance executives seeking their views and priorities for the coming year, combined with what are on their radar for the future and what transformation projects they are currently involved in. We assess knowing, planning and doing to track trends from start to transformation. The effect of COVID-19 on the insurer's planning is particularly insightful and in some cases alarming.

Is the insurer's response a discrepancy with the industry press?

Some insurance companies have responded to COVID by delaying or stopping strategic initiatives that will drive the future of their business. Fear and insecurity have resulted in less action and more waiting. In the same way that the changes reflected in internal and external challenges that we saw in last week's blog, probably influenced by COVID, insurance companies withdrew from previous years in terms of important strategic initiatives that are crucial for digital transformation. Among eleven initiatives that are tracked over time, seven declines (six with double-digit percentage reductions) show their highest ratings in 2018-19.

While Improving the customer experience maintains its highest priority, it decreased by 9% (Figure 1). Data and Analysis and Digital Strategy ranked 3 rd and 4 in priority this year but showed even greater priority declines. This is worrying considering that most insurance companies are just starting a digital transformation. They still retain old "portals" to engage customers rather than next-generation customer experience solutions and do not have the data bases to leverage new data sources required for new products and services, enhanced warranty and customer experiences. If 2020 taught us anything, it is the case that digital priorities such as these must be accelerated rather than stopped or slowed down.

Figure 1: Declining trends in prioritization of strategic initiatives

Surprisingly, the biggest decline in priority was Scaling operations on a cloud platform especially given that Cloud became the mantra and the requirement for companies to function successfully virtual — from Zoom and Teams to Salesforce, Workday and other key systems. This is also in line with the historically low replacement activity over the past year and expectations for this over the next three years. Our research on core systems last year showed that older transformations over the past 5-10 years have taken place to non-platform-modern core systems implemented locally rather than cloud- and API-enabled platforms. Non-platform solutions do not have the broad capacity needed to digitally transform the business and respond quickly to market opportunities or changes. Because of this, insurers are realizing that they need to replace them again to optimize their existing business or, in some cases, to set up a new cloud-enabled core platform to launch new products, enter new markets and create a new business model.

These initiatives are four of five ( Cost Coverage described below, is the fifth) that define Modernize and Optimize in the two-speed strategy for business transformation. While the overall decline is a disappointing development, especially given the rapid market changes that COVID has accelerated, it is becoming clear that Leaders are adapting and accelerating the modernization and optimization of the business while separating Leaders from Followers and Laggards. continues to fall behind. Followers and teammates need to prioritize these more than ever to stay relevant.

Figure 2: Declining trends in the prioritization of strategic initiatives

Cost reduction has been a top 5 priority during all six years of our research, growing 17% since the first survey in 2015-16 and was relatively stable during the last three years. At the other end of the spectrum, Mergers and / or Acquisitions have consistently maintained the lowest priority on the list of initiatives, which is interesting given the continued M&A activity in the industry.

Entry / development of new market segments (+ 8%) and Access to new capital markets (+ 9%) saw a small increase or remained flat compared to the last two years. Two new innovation themes added this year showed a strong ranking:

  • Innovation : 7,14, 4 highest ranked initiatives this year
  • Product innovation for new / changed risks : 6.74, 6 [19659007] highly ranked

The strong prominence of innovation highlights its continued use as a lever for change within organizations.

Together, these four initiatives Create a new company define the two-speed strategy and reflect a positive, growing focus from insurers. Although not shown here, companies focusing on bringing new products to market rated almost all strategic initiatives as a higher priority compared to those focusing on traditional P&C and L&A business areas. This highlights their progress in capturing new markets and customers with new products needed in the future of insurance. The increased priority for developing new products and business models adapts to customer and market changes that we discovered in our lives and auto customer survey last year.

Internal and external pressures that can prioritize initiatives

Resources outside the industry, such as Google's SaaS data and analytics platforms, can accelerate the insurer's adoption of AI and machine learning – effectively re-prioritize Data and analytics activation make it easier to adopt. This is a hallmark of the pressure cooker environment. What pressures will insurers require, no matter what, and what techniques will simply be asserted in future planning because they provide simplicity and a complete solution?

Another good example of simplification that calls for re-prioritization would be the adoption of no code / low code insurance platforms. The internal pressures of IT cost reduction, delivery speed and talent acquisitions make it easy to justify a new model and should therefore make it easier to make a review for re-prioritization.

Business and IT Adaptation

Accelerating business transformation requires business-to-IT alignment more than ever on all these strategic initiatives. Unfortunately, there is a gap between them of 22% (Figure 3). This gap disadvantages insurers and can affect their ability to innovate and be ready for the future. The gap will make the company look for alternative alternatives outside the traditional IT organization, which can create momentum but also create new challenges.

Figure 3: Business IT Gaps in Priority for Important Business Transformation Initiatives

Although these overall planning results are mixed for the industry, the differences between leaders, followers and laggards differ – highlighting the significant benefits that the leaders have. While many followers may be at a relatively fast pace in relation to leaders in modernizing and optimizing the existing business, which is often reflected in strong finances, this is deceptive when you think about the future business that is needed – where Followers and Laggards fall further behind.

Strategic planning must be bold enough to match the speed and magnitude of the changes facing industry.

It is no longer enough to set aside most of the resources to maintain the status quo for the current business. Rather, companies need to redistribute resources to accelerate the areas behind them for both rapid operations and innovation speeds. It's not one or the other – it must be both.

In our next blog we look at Doing . What are insurance companies doing to accelerate digital transformation? We look specifically at insurers' introduction of customer-oriented technology and digital platforms. And we look on the fringes of the industry for examples of companies that have made bold moves to capture opportunities.

So if you're feeling pressured, we encourage you to download and read Majesco's report, Strategic Priorities 2021, to see how your organizational priorities stack up against others in the industry. and to see if you are a leader, supporter or follower when it comes to preparing for the future of insurance.

[i] Staff Writer, The Story Behind the Song: David Bowie and Queen & # 39 ;s Coca-Driven Jokes "Under Pressure" Far Out Magazine, September 29, 2020

[ii] Power, Denise, Immediate potty founder Robert Wang on the power of word marketing US Chamber CO, February 25, 2019

[iii] https://www.gov.ca.gov/2020/09/23/governor-newsom-announces- california-will-phase-out-petrololine-powered-cars-drastically-reduce-demand-for-fossil-fuel-in-california-fight-climate-change /

[iv] Boudette, Neal and Coral Davenport, GM will sell only zero-emission cars 2035 New York Times, January 28, 2021.

[v] Ip, Greg, " Covid-19 driven companies into the future. Ready or Not ”Wall Street Journal, December 12, 2021,

Source link