According to a recent report from Strategy Meets Action (SMA), analytics and mobile are the top priority for technologies this year. As commercial lines carriers rely on big data to improve underwriting claims, insurers continue to invest heavily in business intelligence and analytics.

The report, "2014 Insurance Ecosystem: Insurer Technology Spending, Drivers and Projects" reveals optimism for the future of the insurance industry, as insurers are preparing for growth to adapt to the foreseeable changes in in the market.

IT investments, in particular, will continue to grow, as more insurers are willing to leverage the benefits of business growth, optimization, customer service and cost containment drive the industry, and are necessary for maintaining a competitive advantage in the coming years.

Through research and analysis, SMA compiled a list of the Top 10 Imperatives that insurers should consider when planning for the future.

Taking a look at ways to implement innovation and become a next-gen insurer, and how the Top 10 Imperatives will drive business models for future success. Click through the following slides to learn more.

Top 10 Imperatives for Insurers

1. Innovate to Become a Next-Gen Insurer. As the market rapidly evolves, insurers reinvent their products, services and processes to adapt to change. Understand the leverage points for change, and make wise moves and investments to confront that change. Becoming a next-gen insurer is an enterprise-wide endeavor. Even if change starts small, it is important to keep the big picture in mind.

2. Capitalize on the Consumer Experience. The consumer experience is becoming more and more critical. Insurers must use data, tools, process automation and user experience design across multiple capacity areas to deliver the service that policyholders and agents expect. With technology moving so quickly, insurers need to find new ways to engage their customer base and find innovative ways to service them.

3. Achieve Product Advantage through Configuration. Product configuration with strong rating capabilities is a top priority for efficiency in the market. Insurers must employ product configuration to drive growth, profit and differentiation.

4. Commit to Dynamic Distribution Capabilities. As agents, brokers, MGAs, prospects, policyholders and third parties all have different needs and expectation for distribution, a one-size-fits-all approach is not enough. Insurers need to commit to providing support for every type of submission, inquiry or service request through various channels and via any device.

5. Take Underwriting Differentiation to the Next Level. Take underwriting differentiation to the next level to drive more efficient business processes and improve decisions. Capitalize on data, analytics, and other advanced technologies to extend automation and create a collaborative underwriting environment that fosters growth.

The Top 10 Imperatives for Insurers

6. Extend Analytics across the Enterprise. SMA predicts that analytics and data will continue to shape the competitive background for the next decade, and insurers need to apply analytics by extending them across the entire enterprise, bringing insight to every process, decision and interaction within the company.

7. Optimize Claims beyond the Transaction. Modern claims systems are able to integrate technologies, data and third party information to provide a valuable combination of insight, intelligence and customer care excellence. The results are new insights into operations and improved case management, superior fraud management and better severity control. Additional benefits will include productive adjuster assignments, more effective management of third party relationships and claims transparency for the agent and policyholder.

8. Develop a Unified Digital Platform. Firms have begun to bring communication capabilities into a single platform, which is vital for improving customer service, enhancing agent support, and providing a proactive level of service. A digital insurer can adjust operations and processes to respond to changing demands and new opportunities.

9. Embrace Core Transformation Power. Optimized systems will extend capabilities beyond the duplication or replacement of the function of older legacy systems to empower insurers with flexibility and efficiency. Combining modern core systems with enhanced business processes enables insurers to begin transforming the entire enterprise, becoming the foundation for leveraging Next-Gen technologies.

10. Leverage Next-Gen Technologies. Mobile technology and connectivity trends continually shape the way people and businesses interact, communicate, evaluate, shop and buy. New cloud options for IT delivery provide flexible alternatives. In the midst of a big data explosion, sophisticated analytics are the key for navigating the fluctuating trends and taking insurers into the future.

The Innovation Journey

Instead of fixing broken systems or addressing tactile issues within the company, many insurers are turning their focus to long-term solutions to stay competitive and differentiate themselves within the marketplace. While some are using innovation as a means to get ahead, others are transforming core capabilities first to position their business for growth and profitability.

There are three main stages in the innovation journey:

Cultivate: In order to succeed, insurers must create a culture of innovation within the business by developing a long-term strategy and mobilize resources in order to cultivate innovation within the company.
Activate: In the activate stage, initiatives stemming from rethinking and reimagining the business demonstrate advantage and deliver benefits.
Accelerate: The process begins to pick up in the accelerate stage, as major initiatives converge, innovation is pervasive and the firm moves toward becoming a next-gen insurer.

The Next-Gen Insurer

Forward thinking insurers are beginning to define what it will look like to be a next generation insurer in the next 5 or 10 years. SMA defined four major dimensions of the next-gen insurer and the capabilities that will be necessary for a successful future.

1. Insurers must become customer-centric to be a next-gen insurer. Changing customer demographics and adaptation to new needs and expectations of the next-generation customer will be vital in the coming years.
2. Insurers must rethink and reinvent the way they develop, package, and deliver products and services. Technology allows insurers to learn more about the risks faced by their customers, and will provide the opportunity to customize and personalize offerings.
3. The next-gen insurer must have a culture of innovation and an adaptive business model. Modification to processes and technological infrastructure is not enough to support the next-gen environment. Building an adaptive business model that allows companies to achieve a new level of agility will allow businesses to thrive.
4. Insurers must transform their organization, culture and business models. By changing organization, culture, and business models to harness the expertise of the company, insurers will be able to survive and prosper in the evolving environment.

Special Reports /

2014's Top 10 IT Imperatives for Insurers

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