Paul Wishman

Insurers’ top trends and priorities: A look at the 2017 CGI Client Global Insights (part 2)

In my previous blog, I introduced findings from in-person interviews CGI held in 2017 with more than 1,300 client executives across 17 countries, including insurance business and IT executives. We conduct these interviews each year to get a pulse on clients’ top trends, along with their business and IT priorities, so that we can align our strategies and offerings with their needs.

I shared a number of industry trends that are driving insurers to pick up their pace of change and pursue digitalization. In addition, I covered the approaches insurers are following to transform their businesses, along with their budgets, progress and challenges.

First, here’s a quick recap of the key trends clients identified:

  • Responding to fast-shifting consumer product and digital servicing expectations (92%)
  • Managing costs to maintain/ improve combined operating ratio (73%)
  • Meeting and optimizing regulatory compliance (70%)
  • Extending the industry value chain (69%)
  • Managing the growing impact of emerging technologies, such as dynamic pricing, the Internet of Things and blockchain (54%)
  • Addressing the increasing number and variety of cyber attacks (53%)

In response to these trends, the executives we interviewed shared their top five business and IT priorities—all of which center on driving digitalization to transform their businesses, become more competitive and win more customers. A quick look at those priorities follows, along with related perspectives on their meaning and importance.

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Top business priorities Top IT priorities
  1. Drive differentiated, seamless digital customer experience (77%)
  1. Rationalize, simplify, modernize applications and infrastructure (89%)
  1. Continue to drive end-to-end process automation internally and across the value chain (74%)
  1. Continue to develop data insights to support the business (75%)
  1. Derive value from data to improve underwriting and customer evaluation (68%)
  1. Establish plan for digital transformation (73%)
  1. Increase compliance with the stream of new regulations (62%)
  1. Embrace new IT delivery models (e.g., SaaS, PaaS, agile) (72%)
  1. Develop sticky digital journeys across the ecosystem (61%)
  1. Protect through cybersecurity (65%)

The move to differentiate through digital

The above priorities show that, while control and cost cutting have been key focus areas in the past, insurers are shifting their attention to driving differentiation and customer loyalty on a day-to-day basis through digitalization. They’re investing in new digital capabilities like omni-channel commerce and advanced analytics to support new customer-centric business models and personalize coverage, price and service.

New regulations like the General Data Protection Regulation (GDPR) in Europe also remain top of mind for both the business and IT sides. While GDPR was initially viewed by many as just a data issue, it raises other key issues for insurers, including cross-border privacy rules, cyber threats, payment modernization and open APIs, and sufficient GDPR staff training.

In addition, operating models are undergoing major transformation as insurers look to achieve higher levels of intelligent automation—moving from basic robotic process automation to algorithmic and true artificial intelligence.

As the business side increasingly pursues digital transformation, there is a need for insurance CIOs to deliver strategic—not just tactical—solutions to support real transformational change and drive competitiveness. Losing ground at this point will lead to greater economic pressure in the next few years, so IT departments are rationalizing, simplifying and modernizing the IT landscape.

They also are investing in advanced analytcis, data insights, new IT delivery models and cybersecurity. In addition, CIOs are reducing IT operating costs as competition builds from the emergence of InsurTech startups.

CGI is partnering with major insurers worldwide to help them address the trends and priorities we uncovered through our client insights. In fact, every year, we use the insights to align our services and solutions with our clients’ strategic agendas. If you’d like to learn more, feel free to reach out to me.

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