Would insurers rather be enticed and pulled into the future bythe motivation and promise of transformationaltechnologies or pushed into transformation bycircumstances that lie outside of their control? This is a questionevery CEO and CIO should face and answer as they evaluate the nextsteps in modernization that will lead to their secure futures.

In the past, the forces that had a bearing upon insurers andtheir businesses were primarily competitive, lying within theinsurance industry itself. Today, however, pressures coming fromoutside the industry, such as a digital way of life and widespreadconsumerization, are weighing upon the capabilities of entrenchedsystems and processes. The entire insurance industry, as a whole,is grappling with prototypes that will keep it relevant. A closelook at the business with an eye on the future will yield a greaterunderstanding of the reasons insurers need to transform.

In general terms, transformation is a matter of businesspriorities. Insurers need to transform to improve the business andmeet business imperatives. This idea isn't new. But insurancecompetitiveness is now at the forefront of industry concerns.Remaining competitive and growing the business is the main reasonthat transformation must occur.

Why Do Insurers PursueTransformation? 
Transformation meets thesecommon business needs and goals:

• The world is competitive. The company needs to compete andwin.
• Transformation enables the organization to grow.
• Transformation can create optimal customer experiences.
• An insurer needs good data, better data organization andsegmentation, and transformed views of data in order to understandits business.
• Accelerating product development will make the company moreagile.
• Modern technology costs less to maintain.
• Reducing technology debt will create efficiency in technologyspend and reduce technical risks.
• Creating business process efficiencies and reducing manualbusiness processes will allow business resources to spend time ongrowing the business rather than administering it.
• Eliminating the risk of business interruption by pursuing aguided, framework approach to modernization will maintain legacysystem integrity during the process.

Transforming to compete is a necessity. Themodern insurance model isn't going to allow for old paradigms toremain unchallenged. The competition is becoming more agile,efficient and faster at every point of their operations, includingcustomer service. They are learning faster than ever as well, usingincreased access to higher quality data to improve their datainsights. All of this is being fueled by rapidly improvingtechnologies for data gathering, data handling and analytics.

Improving the customer experience is a goal fortransformation efforts because it answers a number of businessimprovement strategies (including competitiveness and growth).Nearly every process and technology within the organization is tiedto the customer, if not directly, than indirectly. Most insurersagree that creating one brand experience across devices andchannels leads to greater customer satisfaction. Transforming thisarea is also likely to contribute to the quality of data an insurerreceives from its policyholders.

Transforming the gathering and use of datawill accomplish a number of strategic businessgoals. It will lead to better service, greaterdistribution effectiveness, improved pricing assumptions, betterclaims experiences, less fraud (harmful to the company), and alower risk of security breaches (harmful to the customer AND theorganization's reputation).

Transforming product development and creatingefficiencies will enable growth. Transformation withincore systems will unify data and environments, bring agility toareas such as product development, and result in a simplificationthat saves time, effort and resources (as well as reducing fearsand anxieties over legacy breakdowns). These internalmodernizations will serve business by both simplifyingarchitectures and by opening up more areas to access by businessusers. Growing levels of configurability and new methods ofhandling regulatory compliance can revolutionize an organization'sability to compete. The efficiencies found in reducing manualprocesses and simplifying environments will also allow theorganization to shift some resources away from administrative tasksand into growth pursuits.

Reducing/removing technology debt is a benefitthat is strong enough to justify transformation all on its own. Wehave seen numerous examples of insurers who understood that theproactive choice to modernize ended up saving long-term maintenancecosts as well as potential loss costs if the organization waspressured to change in a hurry at a later point in time.Proactive transformation can maximize your value oftransformation exponentially over reactivetransformation.

Keeping the reasons for transformation insight. Transformation isn't an end unto itself. It is ajourney that needs continual monitoring and alignment. If anorganization stays focused on its business imperatives and doesn'tallow transformation to diverge from those imperatives, it stands alogically greater chance of positively impacting the business witheach transformation effort.

Bill Freitag is Executive Vice President and leads theconsulting business at Majesco, which provides technologysolutions, products and services for the insurance industry acrosslines of business – Property & Casualty (General Insurance),Life, Annuity, Health, Pensions, and Group & WorksiteBenefits insurance. Prior to joining Majesco, Bill waschief executive officer and managing partner of Agile Technologies(acquired by Majesco in 2015). He founded the company in1997.