The pandemic has been a wake-up call for insurers. In an industry that has traditionally lagged in digital deployments, the savviest players are reassessing their own infrastructures to reevaluate if and what transformation is needed. They are rethinking business models and looking to fuel innovation with enhanced offerings and experiences.

This is heady stuff in an industry that is typically bogged down by legacy systems and manual processes — and has often lacked integration across carriers and distribution channels. The goal? By implementing intelligent technology in the cloud, insurance companies intend to fuse operational and data silos to create agile, intelligent and adaptive insurance ecosystems that support the evolving demands of customers, employees, brokers, partners and regulators.

These ecosystems will enable new capabilities, fuel insightful data decisioning, streamline internal processes and create new revenue streams — essentially reshaping the future of insurance.

CIOs have a major role to play in this process. Genpact’s latest CIO research report, “Pilots, co-pilots, and engineers,” explores CIOs’ influence over business transformation and offers insights across industries. The report identified three core types of tech leaders:

• The pilots who drive transformation of core business functions.
• The co-pilots who partner with business leaders to deliver transformation.
• The engineers who receive direction from leaders and keep operations running.

Of the insurers surveyed, 25 percent of CIOs identified as pilots, 61 percent as co-pilots and 13 percent as engineers.

Across the board, the report found that CIOs continue to face challenges in business transformation, including a lack of collaboration between IT and business functions, difficulty attracting and retaining top talent, and changing customer demands.

Process and experience-led digital transformation tools can help companies find new growth opportunities and solve these existing challenges. For example, end-to-end value stream redesign backed by cloud-based intelligent technology can streamline processes and key functions for insurance companies, such as underwriting and claims life cycles. This will improve customer, employee and partner experiences. In addition, it will enable a range of capabilities, from automated data extraction, orchestration and omni-channel service to business operational and financial reporting.

Data Drives Innovation

The report found that CIOs across industries are aligned on the need to be data driven. In fact, 98 percent of those surveyed agree that their companies make data-driven decisions to realize business value. As an industry that’s built on data, insurance is always hungry for more. But for many insurers, their existing technology continues to limit data quality and the nimble, insight-based decision-making that’s required for a competitive advantage.

Most CIOs surveyed are focused on artificial intelligence (AI) and advanced analytics, moving to the cloud, and application modernization. Investing in automation ahead of the pandemic enabled organizations to better adapt and push forward with success more easily. Adopting analytics, AI and more advanced technologies will enable CIOs to make the most of their data, generating predictive insights for more informed decision-making.

Ways to Overcome Technology Challenges

There are several ways CIOs can help with business transformation:

• Upgrade or isolate legacy systems. Challenge existing technology platforms and determine what legacy systems can be modernized or isolated. Of those surveyed, 41 percent of insurance CIOs said legacy systems are the barrier to achieving companies’ digital transformation goals. To solve business challenges and add business value, CIOs must build a flexible, agile, high-velocity technology backbone using cloud, data and AI as the three fundamental building blocks. Having unified orchestration layers housing business and experience processes can act as a single pane of glass into disparate underlying legacy systems and data.

• Leverage the cloud. Adopt a cloud-first approach with a clear road map to slimming core architecture. Consider introducing or replacing applications with software as a service (SaaS) applications and re-platforming applications to function in the cloud. Leveraging the cloud enables scalability-on-demand and can improve the customer experience. Of the CIOs surveyed, 38 percent are introducing or replacing applications with a SaaS-based application stack, 40 percent are re-platforming applications to function in the cloud, and 44 percent are migrating their data centers to the cloud.

• Prioritize data-centric strategies. Build a strong data foundation to deliver results through analytics and enable decision-making required for a competitive advantage. Implementing data-centric strategies that strive for integrated data across critical value chains will lead to richer insights.

• Invest in AI and ML. These capabilities are often considered complementary. They represent one of the largest technology categories that CIOs are prioritizing across industries. Continue to build capabilities and use cases for AI and machine learning (ML) adoption to help adapt to changing business conditions and deliver on a data-driven culture. Start small: CIOs can look for quick wins that leverage AI to make people’s jobs easier and prove out the capability.

• Build bridges. Collaboration is key. Of those surveyed, 44 percent of insurance CIOs say there is still a divide between the business side and IT that can get in the way of digital transformation goals and adoption of change. CIOs have a unique opportunity to unite their company’s business and technology strategies by connecting with colleagues and creating better data workflows internally. One way to do this is to embed IT people into operations so they understand processes and what needs to be fixed to build support for change.

It’s important to keep in mind that digital transformation is not just about technology and data, it’s about people, processes and partnerships. The key is demonstrating how these can all come together to create seamless experiences for employees and customers.

To “futurize” the insurance industry, CIOs must invest in change management capabilities, leverage data analytics and free up time to explore emerging technologies.

John Heveran, CIO of global risk solutions at Liberty Mutual, sums it up in the report.

“We don’t sell a physical product; we sell a promise,” he says. “We promise that if something goes wrong, we’ll make it right. And my role is making sure we use technology most effectively so we can deliver on that promise.”