Technology Trends and Innovation in the London Insurance Market
Credera has been working in the London Insurance Market for nearly 15 years, providing assurance and advisory on market modernisation, strategic transformation, and IT operations for central services.
During this time, we have had the privilege of engaging with the CIO and senior IT leadership from firms operating within the market. Whilst the opportunities and challenges that these organisations are presented with are similar, we were keen to understand the differences in the approaches taken and the key drivers behind them.
We recently had the pleasure of partnering with the IUA to research and develop the Technology Trends and Innovation Survey, which saw us speaking with senior IT leaders across the membership of the IUA to get insights into to the following overarching questions:
What technology trends and partnerships do IT leaders think are important?
How important is innovation to achieving their strategy?
What are the key success factors in response to COVID pandemic?
In this blog, we highlight some of the key themes that have emerged from the survey, share our own thoughts on these themes, and explain what this tells us about the London Insurance sector.
Strategic drivers for London Insurance Market members
As with most industries, the market is experiencing unprecedented change. The speed of technological developments together with changes in industry such as Brexit and COVID has necessitated agility and digital adoption by organisations in order to thrive.
Survey respondents highlighted that reacting to regulatory requirements continues to be a high priority for market participants, but this is viewed as a hygiene factor. They would prefer to focus on real strategic objectives such as improving operational efficiency, unlocking additional revenue, and improving customer experience. Organisations that have been able to drive agility have been best able to deliver on both regulatory and strategic objectives. Key headline themes that emerged from the survey include:
Market wide transformation programmes are common.
Rapidly evolving IT landscapes with large-scale adoption of cloud are underway.
The key drivers of transformation are data-enablement and digital technologies.
Machine learning and AI are key to achieving revenue goals and operational efficiencies.
Digital transformation is imperative to remaining competitive
Transforming to a digital operating model is considered the highest priority for organisations in achieving their strategic initiatives. Simplification of processes and enabling data-led straight through processing minimises manual intervention through the process. This reduces operating costs and improves customer experience during the placement, settlement, and claims processes. Furthermore, introduction of new data sources allows information to be collected proactively in advance of claim submission, which can help to improve claim approval times.
Unlocking value with data and automation leads to efficiency and opportunity
Insurance organisations of all types must deal with vast quantities of data and typically disconnected platforms. Using data-driven insights with automation is seen as the single best opportunity to reduce time to get new products to market and create operational efficiencies. Data driven insights lead to better decision making, improved operational processes, and customer-focused experiences.
To achieve this, organisations are placing a large emphasis on establishing data management capabilities, enabling the business and data scientist community to access and draw meaningful insights. We also see AI providing compelling insights in areas such as risk modelling, underwriting, and claims processing. Of course, use of AI in modelling requires the right governance and framework to prevent invalid correlations, to prevent bias in model training, and ensure transparency in AI decision making.
Innovation is key to future success
We were encouraged to see respondents recognising the importance of innovation. Commitment and collaboration were understood to be critical for innovation but were also recognised as a significant challenge given the complex nature of the insurance sector. Today’s approach to trialling new ideas was also considered too ad-hoc and we see significant opportunities for organisations that take a more rigorous, structured approach.
In a nutshell
The recurring theme that has emerged from the survey is the need to drive greater agility through organisations. Insurers who have unlocked this agility have successfully transformed customer service, improved revenues, and driven down operating costs, without being distracted by the increased burden of regulation.
COVID-19 has strengthened the case for agility within organisations that are adapting to new ways of working. This provides a useful case study to reinforce some of the key findings of the report:
Pace of change was key to responding.
Organisations exercising agility were the least impacted.
Many had a short-term redirection of resources to enable remote working.
The most agile were soon returning to their strategic programmes, as these were delivering efficiencies and processes which would enable them to cope better with this and future challenges.
Some took time to take stock of their programmes. The output of this was invariably a little reprioritisation and a redoubling of their efforts as the business case was stronger than ever.
For many businesses, their response to COVID-19 and the changes that it has brought about has revealed the art of the possible, with the move to digital being accelerated. The question now remains – can this be sustained, and how can organisations turn this agility to new challenges? The organisations that succeed at this will find themselves at a real advantage.
If you would like to learn more about organisational change management, please get in touch with one of our insurance sector leads.