As the world is increasingly merging the physical and digital realms, the distinctions between real and virtual continue to blur, creating a “phygital” landscape. This convergence is revolutionizing the interactions across technology, business, and talent, transforming multifaceted ecosystems into interconnected ones where these elements coexist and can enrich each other.
So, digitalization, AI, Automation the many identities of Technology…what’s making the news in 2024? Here’s what you need to look out for to ‘keep up’ or ‘stay ahead’ as an Insurer when it comes to leveraging the wide spectrum of tech – (mind you – this is not everything though!)
1. Digital Transformation Wave- The strengthening of InsureTechs in terms of their digital assets, applicability & solutioning is significantly accelerating digitalization amongst Insurers.
Digital transformation in the insurance sector has become a strategic imperative, throughout the value chain, right from creating user-friendly platforms/workflows, implementing digital onboarding, and deploying RegTech for legal compliance to conducting Rapid Prototyping and facilitating UBI, etc. with AI-ML, RPA, OCR, etc. all at play in the ecosystem. The starting step to fully absorb the dynamic changes is rethinking the way your ‘Tomorrow’ should look like- lower TATs, self-service portals, automated process mining? This choice is yours, but the choice of making a transformation, undisputable.
2. Journey to the Cloud- A large segment of Insurers has initiated their cloud journey, although its adoption at a high scale level remains the challenging part. Insurers are adopting a strategic, phased approach to cloud transformation, focusing initially on critical business areas such as underwriting and claims processing for achieving business agility, enhancing growth, and ensuring an efficient transition from legacy systems.
Despite initial hesitations due to security and integration concerns, there is a growing trend of extending cloud adoption beyond non-core functions, driven by a changing mindset among insurance leaders, recognizing the benefits of cloud capabilities. By expanding cloud to the core functions, insurers are not just migrating to the cloud; they are also re-engineering their core processes to fully leverage cloud potential. Techniques like API digital wrappers are being employed to securely expose legacy data sources to cloud environments, facilitating the implementation of advanced technologies such as generative AI.
Early adopters of Cloud-at-scale can gain significant benefits, also taking a lead in the digital realm.
3. Taking the LC/NC Path- Insurers are swiftly inclining toward Low-code/no-code (LCNC) platforms as they are gaining traction due to a transformative trend aimed at accelerating digital evolution and improving operational efficiency. These platforms allow the development of software, services, and information systems with minimal manual coding addressing the gap between technical and business teams, reducing the overbearing IT Costs and accelerating turnaround times.
They can help insurers update and enhance legacy systems without the need for comprehensive redevelopment – extending the life of existing IT investments while incorporating new functionalities.
Overall, the LCNC platforms are expected to have a lasting positive impact on the insurance landscape, making them a critical component in the toolkit of modern insurers.
4. AI taking the Front Row- Not a conversation about a digital future goes by without mentioning AI. While still in the early stages of adoption, generative AI is beginning to show significant potential in areas like claims management and customer service. These applications are likely to be the first to demonstrate the profound effects of AI on enhancing policyholder retention, satisfaction, and operational efficiency. Insurers have started integrating generative AI with low-risk business applications such as generating reports, crafting customer communications, and designing marketing materials. These initial steps are crucial for reducing costs and optimizing resource allocation, setting the stage right for more comprehensive org-wide adoption aligned with key functions’ strategic business goals.
As the technology matures and more use cases are validated, generative AI will undoubtedly become a cornerstone of modern insurance operations.
5. Let Go: Legacy- With about 70% of the IT Budget being strapped with managing and utilizing the Legacy systems, Legacy continues to be a major pain point for most Insurers, and as the competition posed by born-digital players rises, companies have no option but to Let-go of Legacy as its slowing down innovation across business and the speed-to-market for delivering new products and better service.
The direction and future success of these companies increasingly hinge on forming strategic partnerships and embracing outsourcing capabilities- with InsureTech, TPAs, and so on. And what’s the key factor that dominos success for such moves, you ask? None other than Digital leadership.
6. Big Data, Bigger Impact- Whether it’s capturing data from your customer’s smart phone or relying straight on genetics, data is hidden into the micros of Insurance value-chain. And the realization that Data is the new oil has definitely dawned upon the insurers. But that’s not it, Insurers are shifting focus from the sources of data to its- Quality, Health, Management, and its utilization for decision making because despite Data being at the core of businesses, research say that as much as 80% data in insurance industry is unstructured so where does the value truly lie – a question to ask your CDO.
If you’re aiming to leverage data for a scalable, insight-driven, data-led future we suggest the macro-to-micro approach starting with ‘What calculated decisions are essential for your business growth?’ eventually seeping into details.
7. Quantum Computing ‘The Plus One’- Although considered a thing of future, quantum computing is gradually gaining momentum amongst the stand-out insurers with an innovative and experimental ethos.
The sheer volume and assortment of data that quantum computing can derive value from is well beyond ‘conventional’. This technology can be applied by insurers to hyper-personalize products through sophisticated underwriting models that integrate vast datasets from diverse fields such as health, economics, and climate science, enabling a nuanced balance between premiums, risk exposure, and profitability. Additionally, quantum computing can significantly improve catastrophe modeling, equipping insurers to more accurately and quickly simulate and predict natural disasters. We will see many more use cases in the future, until then happy exploring!
That said, it might be the right time for your teams to raise the RIGHT questions to know what 2024 or even 2034 can look like for you (it’s not just a forward move, but also an upward one). These might seem overwhelming, but please remember, all these trends are pieces of the puzzle for Insurers in becoming truly ‘Digital’ holistically, and the journey to this has to be ‘Incremental’ with the motto of focusing on the ‘little bets’
We, at Manomay, are going to focus on enhancing, and re-calibrating our services & products to support you and bring you the right insights as a part of our newsletters.
Think we forgot something? Let us know and we’ll be back with answers! Reach out to us at biztechinsights@manomay.biz
Biz Tech Insights Team Manomay
Disclaimer: The views and findings expressed in this material are for informational and educational purposes only. It is not intended as a guideline, recommendation, or substitute for any form of Professional (Consulting or Technology) advice. Under no circumstance shall we bear legal responsibility for using or relying on any information mentioned in this article. Unless otherwise specified, the views, case studies, and findings expressed herein are our own. The content displayed here is the Intellectual Property of Manomay Consultancy Services (India) Pvt Ltd. You may not reuse, republish or reprint any of the aforementioned content without our written consent.
Sign up for our newsletters!