How can major insurance organizations take action to ensure they will be able to endure in the future?
What are major insurers doing to modernize their businesses to compete more effectively, and to stay relevant and healthy?
This paper discusses how these insurers evaluate and manage risk and cost principles for their insurance technology investments, and how they are finding the right balance between maintaining their existing solutions and making investments to capture new opportunities and exploring the potential capabilities of insurance technology ecosystem partners.
How to deal with unknown technology risk
In the first section of the paper we discuss how insurance leaders are trying to strike the right balance between maintaining their old income-generating assets and making new investments to modernize their businesses while maintaining their desired expense, loss and combined ratios. They are also trying to determine how fast they need to transform to manage competitive risk from possible new entrants.
Read the paper to see DXC's view on the sorts of influences that we think are likely to create new insurance possibilities and some prerequisites for these possibilities to be realized.
Ten insurance behaviors predicting success
In the second section, based on our interviews and research in insurance and other regulated industries, we have identified 10 practical and replicable provocations for insurers to focus on.
We provide more detail on the behaviors that address significant industry drivers such as the need for customer focus, the profound change in IT cost structure, the role of transformational leadership and the potential of platforms and new risk data. Less obvious behaviors focus on alignment of technology strategy and the convergence of IT and business operating models.
These 10 provocations are:
- Satisfying deep customer needs. “Our core belief is customer focus, it’s our number one topic.”
- Operating model. Insurance business models and technology operating models have been treated as different things and they aren’t any longer.
- Modernizing technology. The stranded costs of insurance technology will choke future growth opportunities. Modernization creates cost parity, but more importantly agility.
- Insurance technology skills and ways of working. The transition from old skills and ways of working to new ones is going to be tough. You can’t tiptoe into this change, but there is hope.
- Technology transformation risk. The most successful insurance technology transformers are using their core skills of understanding and balancing risk to digitalize more safely.
- Technology strategy. Technology strategy becomes business strategy, and therefore a boardroom topic.
- Insurance platforms and ecosystems. Simplification, consolidation and standardization lead to insurance by configuration.
- Sources of disruptive risk data. Where are the killer use cases for and differentiators of new data?
- Transformational leadership behaviors. Transformational leadership, ownership and politics are complex. Successful leaders find the balance.
- Competing more effectively. With every technology deployed, there’s a strategy to exploit it competitively.
About the authors
Ash Pal works with leaders on large transformations, primarily in regulated industries. Clients engage him to help them successfully improve their organizations through digitization of leadership practices. His progressive thinking and practicality help modernize what are often well-established, conservative, change resistant firms. His regulated experience covers a wide variety of the world’s largest insurers as well as firms in other regulated industries such as banking, energy, pharmaceuticals and healthcare.
Dr. Alex Kokkonen is a senior researcher and advisor, working with customers to solve their most pressing business issues via research-led advisory interventions. With over 25 years of experience, Alex brings extensive international and multi-industry experience from working in a variety of multi-disciplinary leadership positions and diverse cultural settings for major blue-chip companies. She has driven IT and business research concepts into business transformations and holds two doctorates, one in IT and one in business. Prior to joining DXC, Alex held a variety of leadership roles, most recently in KPMG’s CIO Advisory and Technology Enablement practice. Connect with Alex on LinkedIn and Twitter.
Krzysztof (Chris) Daniel is a researcher and advisor, teaching others how to effectively use Wardley Maps for their benefit. Chris works with customers to apply Wardley Maps to particular use cases, including outsourcing, IT modernization and business transformation. He enjoys mapping sessions with customers, guiding a process of identifying opportunities and risks and defining areas for growth. Chris is the author of the online Wardley Mapping course and an active member of the broader Wardley Mapping community. Connect with Chris on LinkedIn.