Why data, AI, and digital marketing are a priority for insurers
INSURERS have seen many changes in recent years, including new competition, the emergence of insurtechs, and shifting consumer demands for new products and/or services.
Digital is the most common top business priority for insurance CIOs in 2018 and 2019, according to Gartner’s 2019 CIO Agenda for the insurance industry. For the first time, this has moved to the top of the list, outranking revenue and business growth in focus.
This journey includes improving customer experiences, building out ecosystems, establishing enterprise intelligence through improved data and analytics, and adopting an open innovation platform that relies more on ecosystem partners.
This also comes with its challenges. Digital business models are more demanding than ever before as they require fast response times, agile operations and more vision.
Demands to support business transformation are growing as a result, including the ability to reduce transaction costs to compete and speed up business processes in almost real-time.
“In this rapidly changing insurance environment, insurance CIOs need to work closely with business leaders to drive digital business, developing business ecosystems and digital platforms to truly transform their firms and support growth,” advised Weiss.
The changing role of CIOs in the insurance industry
In most cases, insurance CIOs have to improve their digital capabilities while managing legacy environments and new threats such as cyberattacks.
This puts stress on IT overall, as CIOs work to balance these needs, meet the new demands of the business and lay the groundwork for innovation and emerging technologies.
Gartner has increasingly seen insurance CIOs struggle with identifying new demands for the digital enterprise. Overall, the introduction of digital transformation has impacted the IT department in many ways, including organization structure, vision, ability to execute effectivity, the need for agility through IT innovation and staffing.
Many lack the background, vision and technical skills around emerging technologies needed to support the emerging business needs that are critical for digital success, especially as they operate in non-IT-centric roles.
As a result, it’s imperative they become aware of the emerging roles and responsibilities, for themselves and the IT department, that are critical for their continued success.
Digitalization is changing the role of the insurance CIO in three main ways, according to Weiss:
# 1 | The intersection of IT and business strategies require that insurance CIOs develop a stronger business acumen to exhibit business-level thought leadership and strategy development.
# 2 | The demand for a more agile and innovative IT environment requires that CIOs balance innovation, including the use of emerging technology throughout the value chain, with legacy environments.
# 3 | Digital insurance demands that CIOs reshape their workforce by implementing new training programs, hiring new talent and supporting the use of machines, such as robots and AI engines.
The changing (digital) needs of insurers
“Over the last four to five years, Gartner’s seen growing demand for collecting new forms of data, better analysis of both structured and unstructured data, and the effective use of a range of technologies to manipulate data,” said Weiss.
Building data mastery has become a top priority as companies focus on building stronger governance, leadership, and analytics.
This is expected to continue during the next few years as insurance data leaders seek to apply advanced tools and algorithms in areas such as marketing, underwriting, pricing, and claims.
“AI has also risen in importance, moving to the second top game-changing technology,” explained Weiss, who will be speaking at the Gartner Symposium/IT Expo 2018 next week.
As insurers mature their data mastery, they’ll seek more advanced tools to support analytics, including those that apply learning-based principles such as AI and machine learning.
We’ve also seen great interest over the last 12 months in the use and application of AI for many tasks, including chatbots for customer service, underwriting assistance platforms and AI for no-touch claims processing.
Digital and digital marketing technologies come in third place.
Insurance CIOs have made inroads into digital, applying the most basic digital technologies already — such as those for channel enhancements and omnichannel support.
At the end of the day, CIOs in insurance companies are under great pressure to deliver customer-first, digital ready tools and solutions that not only delight customers but also provide the business with a strong competitive advantage and a great ROI.