COVID-19 has had a significant impact across all sectors of the insurance industry, with technology playing a more critical role than ever in insurance organizations’ ability to survive and thrive. In a recent Harvey Nash/KPMG survey of 190 insurance CIOs globally, 60 percent said that the COVID-19 pandemic has increased the influence of the technology leader.
“The opportunity has never been greater than in the current environment for insurance CIOs to work as strategic partners with the business,” said Gary Plotkin, Consulting Insurance Practice Leader, KPMG LLP. “Technology leaders are needed to quickly address critical layers of the IT operating model, enhance operating efficiency through automation, improve the customer experience and implement emerging technologies to address immediate and future needs, allowing the insurance business to grow.”
“Digital has now become omnichannel, and digital capability is a must-have across the board,” added Plotkin. “There is a focus on speed to market for new capabilities, which was previously hampered by the carriers’ own processes, regulations and technology.”
Increased investment in IT to drive efficiencies
According to the survey, the future IT priorities are clear, with 45 percent of insurance organizations planning to accelerate transformation and drive-up efficiencies through increased investment in digitization, addressing the needs in the new COVID-19 environment.
The three most important technology investments in the new reality are:
“Increased security and privacy being a number one priority comes as no surprise due to the remote nature of employees, as well as the desire to move to the web, driving the need to improve security and controls around the entire insurance business,” said Plotkin. “The need to improve automation and digitization, as well as improve the customer experience, is being driven externally as more and more people are now buying insurance products online and expect digital servicing, as well.”
Driving business performance through technology
The survey also found that 23 percent of insurance CIOs identify their digital capabilities and investments as very or extremely effective. These digital leaders were able to drive more impact to their businesses than others:
“These figures quantifiably show the benefits of investing in the digital agenda,” added Plotkin.
A clear commitment to people and culture
In terms of culture, the survey found that 43 percent of Insurance CIOs believe COVID-19 has created a culture of inclusivity in the technology team, and more than half believe that promoting diversity improves access to the right skills, trust and collaboration, engagement with the business and the creation of customer-focused products and innovation.
“The propensity to stay remote for a percentage of the workforce going forward has made insurance companies start thinking more about culture and leadership, brand reputation and increased training and reskilling, as all are vital for future success and growth,” said Plotkin.
What does the future hold in insurance?
Survey results indicate that CIOs in insurance must move quickly and act holistically, addressing the critical layers of the IT operating model to move the needle beyond point solution.
“In the future, there will be an end-to-end digital ecosystem - value chain - where almost everything will be done with limited human interaction, from quote, to bind, to claims handling,” said Plotkin. “New products and capabilities will emerge much faster and be more customizable. In addition, there will be further recognition that cyber risk is an insurable risk; as more insurance products are created to address this issue, we could potentially see it become a top-line growth item.”
To learn more about the findings of the Harvey Nash/KPMG CIO survey or to arrange an interview with KPMG’s Gary Plotkin, please contact Andreas Marathovouniotis.