Technology
Frame of Mind
Having a technology mindset is key to building an insurer’s financial future.
Insurers are at an inflection point when evaluating their technology investments.
A fast-changing world is putting pressure on their traditional business models, and many insurers have been responding by investing in technology.
As they adopt new systems with artificial intelligence and cloud solutions, a big question is being asked of executives: Are technology investments paying off in revenue growth just yet?
Organizations believe they have a good grasp of technology, according to Accenture's Future Systems study, which included a survey of more than 500 insurance firms. However, many insurers still lag behind their leading peers when it comes to the value they derive from those tools.
How is the industry extracting the most from their investments?
Leaders will likely double revenue growth. An insurer's journey with technology will determine how much revenue growth they can achieve. Innovative firms that score among the top 10% across three components, including how well they adopt technology and embed it in processes and culture, are set to double their revenues from 2015 to 2023, Accenture reports.
It's during the time when leaders will break from the pack that we expect them to capture 37% more in revenue growth over “laggard” companies, or firms that scored the lowest across the three components. Even firms who score in the middle still show themselves to be missing out on revenue opportunity growth. The difference can equate to billions of dollars.
The best systems adapt to humans. Insurers who trail industry leaders tend to fall behind when it comes to mastering technologies at scale and at speed, decoupling the IT stack and building flexible architecture.
Adaptable systems powered by data and intelligent technologies learn on their own. Systems must be able to talk, listen, see and understand the way employees do their work and how customers engage.
Silo-based spending is counterproductive. Insurance CEOs' best intentions are thwarted when they place business unit, product or geography heads in charge of all technology investments for their areas. While this approach delivers short-term benefits in those areas, it also creates silos of deeply established technology that isn't easily interoperable.
Without appropriately connected data, the business is barred from the full potential of insights and innovation opportunities that the data generates. It also results in more complex systems maintenance when looking at enterprise scale technologies.
Collaboration and cultural integration are key. More than 90% of insurance leaders are effective at working with cross-department teams, according to Accenture research. But above all, CEOs will need to clearly articulate the business outcomes they expect and invest in technology that aims to deliver those outcomes.
The most important success factor is how decision-makers see the potential and purpose of their organization's technology spend.
Mindset not money. While investment in key systems is necessary, it isn't enough to ensure you're a market leader.
Technology is not a silver bullet, but its full potential is about finding the right way investments are planned and managed, how they are used to transform the workforce, and the corporate mindset that influences all decisions and behavior.
The differences between leaders and the rest of the pack are key to understanding where you really are and what you should be doing.
Best’s Review contributor Darcy Dague is a managing director in Accenture’s insurance practice. She can be reached at darcy.v.dague@accenture.com.
