How insurance CIOs will achieve real transformation-KPMG Report
Article Synopsis :
The insurance industry is in flux with fast-changing technology and shifting regulatory dynamics. Are CIOs ready to take up the challenge?
“Be bold: How insurance CIOs will achieve real transformation” from KPMG highlights the struggles faced by many leading insurers integrating disparate systems, distributed applications and siloed data structures in their quest to become more agile and flexible.
The fact is many legacy systems are incapable of delivering on emerging digital needs. This limitation is being exploited by non-traditional competitors, primarily InsurTechs who utilize cutting edge technical skills to target niche insurance demands.
Recognizing the massive transformation barriers and challenges they face, insurers have been taking dramatic and aggressive steps to catalyze fundamental change across their IT organizations. Per a survey of 160 global insurance IT leaders conducted by Harvey Nash and KPMG, organizations are taking the following steps to become more agile and responsive:
69% – Implementing Agile methodologies
38% – Dev-Ops (combining development with infrastructure management)
35% – Multi-modal IT (e.g., Run, Change, Grow)
31% – Buying rather than building solutions
25% – Strategic partnerships
23% – More external resources
Though carriers have proactively taken up digital transformation initiatives, they have typically not been able to sustain them over the long-run. Challenges include organisational mindset, low view of the customer journey, integrating new systems with legacy back-ends, and less collaborative work environments.
Part of the challenge is management boards often look to IT for cost optimization and not necessarily revenue growth, with IT, by extension, viewed as a cost center. To the survey question, “What are the top five business issues your management board is looking to IT to address?” The top answers are as follows:
56% – Increasing operational efficiencies
51% – Delivering business intelligence/analytics
49% – Delivering consistent and stable IT performance to the business
48% – Developing innovative new products and services
47% – Saving costs
CIOs and IT leaders, per the report, must become more aggressive and decisive in championing transformation initiatives, with a focus on simplifying and/or reducing system complexity, improving accessibility, and enhancing organizational agility. On the last point, insurers are advised to review existing sourcing agreements for their potentially adverse impact on innovation and growth, as most such agreements were negotiated in pursuit of costs savings and nothing more.
CIOs must also aggressively explore new technologies such as robotic process automation, artificial intelligence, and machine learning for incorporation into operations. These technologies, when coupled with a simplified IT infrastructure, improve responsiveness and agility – as well as lower costs.
Link to Full Article:: click here
Digital Insurer's CommentsCIOs and IT leaders aiming for sustainable digital transformation are advised to focus on two things: Simplicity (of mainly environments) and Speed. In most cases the two are related.
Agile and dev-ops, for example, require automation and thrive on simplification. Digital labor (including robotic process automation and cognitive automation), now finding its way into the technology toolkit for insurers, offering to improve quality and responsiveness at lower cost, requires integration with back-end systems which is facilitated by a less complex IT estate.
Armed with a clear vision, securing a strong mandate from the board is the essential factor in driving success.
Link to Source:: click here