Now in its 22nd year, the Harvey Nash / KPMG CIO Survey 2020 is the largest IT leadership survey in the world, with over 4,200 responses from CIOs and technology executives across 83 countries.
The survey base includes a significant number of IT leaders in the insurance sector -- so what are their priorities and how are these being shaped by the COVID-19 pandemic?
Like all sectors, insurance businesses face a different landscape in the wake of COVID-19. A surge in customer inquiries and claims due to the pandemic, at the same time as the need to move staff and operations to a remote footing, put significant pressure on systems and ways of working. Although the sector proved itself adaptable, traditional insurers have historically lagged behind other sectors in digitization efforts.
However, insurance organization fared better than feared, overcoming the typical barriers (risk adverse, capital constrained, legacy systems) traditionally associated with the sector.
As expected, more recent entries, such as insurtechs, who had already invested heavily in technology that enabled better customer engagement, were better positioned entering the pandemic.
The IT priorities for the future are clear. Insurers need to drive up efficiencies through increasing digitization and the automation of manual processes such as claims, payments, and assessments -- in a way that also improves customer engagement. Another crucial focus is to leverage data & analytics for sharper insights into market trends, customer behaviors, fraud detection, underwriting risks and the profitability of different insurance lines as insurers create new products to improve the bottom line and maintain liquidity. In the post-COVID world, there will be much for insurance CIOs and their teams to deliver on the digital transformation agenda due to the high level of disruption to the sector.
- Top IT investment areas: For insurers of all types (carriers, brokers, agents, MGAs), operational efficiency is the top priority that leaders are looking for IT to help address -- so it is no surprise that and automation is the top investment priority. Insurers will need to invest in connected platform technologies and automation throughout their front, middle and back office for their digital transformation.
- Delivering value at speed: Digital leaders in the sector are much more likely to be making large scale investments in distributed cloud, AI and intelligent automation. They are using their digital offerings much more effectively to improve the customer experience and collect valuable data. Those trailing no longer have 5 years to realize the benefits of their cloud journey as the competitive landscape has fundamentally shifted.
- People and culture: With so much resting on technology, addressing skills shortages in the IT team must be a key priority. Cyber security is the number one skills shortage for insurers, a sign of their awareness of the heightened need for resilience and security to retain client trust with the new risks that the digitization agenda brings.
- Analytics and insights: A rapid response to an uncertain environment is expected to become a new core competency -- and this can be founded on data & analytics insights. Use of more advanced models and algorithms leveraging more complex internal and external data signals will likely be key in areas such as underwriting and claims, with an increased need for scaling AI to conduct continuous scenario planning and analyses to gain real-time understanding and prediction of trends.
The opportunity has never been greater for insurers to deliver on the digital transformation agenda but they must do it in a way that leverages data & analytics for sharper insights and improves the customer experience.
With technology more important than ever to organizations’ ability to survive and thrive, the opportunity has never been greater for CIOs to work as strategic partners with the business. Collaboration between the business and technology teams is increasing — this relationship is something that CIOs must build on to ensure their organization’s digital transformation success. CIOs must move quickly and holistically, to address the critical layers of the IT operating model — enhancing operational efficiency through automation, improving the customer experience through digitization and self-service options, and embedding emerging technology innovations for greater responsiveness and market speed.
How KPMG can help
KPMG firms are some of the largest providers of services to insurance organizations globally, we take a tailored approach to client issues with a focus on flexibility, adaptability, and innovation. We recognize that there are many on-ramps to supporting IT transformation and we’ve tailored our services accordingly: