{"id":59778,"date":"2020-02-06T13:32:16","date_gmt":"2020-02-06T18:32:16","guid":{"rendered":"https:\/\/staging.majesco.com\/?p=59778"},"modified":"2022-11-09T18:56:40","modified_gmt":"2022-11-09T23:56:40","slug":"strategic-priorities-innovating-with-urgency","status":"publish","type":"post","link":"https:\/\/staging.majesco.com\/?p=59778","title":{"rendered":"Strategic Priorities: Innovating with Urgency"},"content":{"rendered":"

If it were possible to take a time-lapse video of an industry, insurance would be fascinating. Think of all that has transpired over the last five years. The buds of InsurTech have unfolded to announce the coming of a new type of insurance industry. Many insurers have moved from a self-sustained silo business model to a growth-focused, partner-seeking model that will accommodate innovative ideas. They are planting their own seeds of growth with digital technologies and customer-centric processes. The need for new product types has pushed insurers out of their comfort zones and into the land of opportunity fostered by ecosystems<\/a> and platforms<\/a>. In a time-lapse video, we would see many traditional insurance processes wilting and dying while new ones are thriving with flexibility and agility. We might glimpse the winds of investment shifts. We would certainly see the animated development of new channels and the improvement of existing channels.<\/p>\n

You might be surprised to know that this time-lapse perspective actually exists \u2014 and you have access to the results. Majesco\u2019s Strategic Priorities Reports<\/a> act as a camera, uniquely-positioned to view our industry through the lens of strategic priorities across a broad range of insurers. Because this is Majesco\u2019s fifth year in surveying and tracking the information, we are now able to provide a valuable set of comparative statistics that will help insurers to grasp where the industry has been and where it is headed. Majesco\u2019s new report, Strategic Priorities 2019-2020: Insurance Transformation Gains Momentum<\/a>, takes readers to the heart of technology and priority trends to consider what is currently important to executives like you.<\/p>\n

Business Model<\/strong> Transformation is Visible Through Knowing, Planning and Doing<\/strong><\/h2>\n

The Strategic Priorities camera uses Knowing, Planning and Doing as its time-tested benchmarks. Knowing, Planning and Doing survey questions around key areas have been a useful verification gauge for the measurement of transformation strategies. Because organizations move through all three phases on their way to accomplishing their strategic goals, Majesco is able to capture an aggregate picture of where the industry is at on the journey. We are able to also assess the steps in reference to their stated priority. If insurers\u2019 responses indicate that a certain technology, for example, is a strategic priority, then it is likely that we\u2019ll see that technology moving from knowing, through planning and into doing over a very short span of time.<\/p>\n

Strategic Shifts are Real<\/strong><\/h2>\n

Over the last five years, we have seen dramatic changes in the industry, from the influx of capital into InsurTech to the rapid adoption and maturation of emerging technologies and a seismic shift in generational buyers that continue to point insurers toward new strategic priorities that are driving growth. In particular, the development of new business models, new products and expanding channels are seeing strong strategic shifts \u2013 reflecting a focus on the two-speed strategy \u2013 speed of operation and speed of innovation.<\/p>\n

Within this year\u2019s Strategic Priorities survey results, we found that replacing core systems<\/em> dropped in priority from last year, even though there remain significant Non-Platform systems \u2013 monolithic legacy and modern on-premise systems.  In contrast, the development of new business models<\/em> and new products<\/em> are the two highest areas of activity \u2013 reflecting a strong shift to speed of innovation \u2013 and potentially the use of new cloud SaaS based systems to launch both, given the challenges of existing businesses to rapidly innovate. Whereas legacy replacement has been a heavily IT-driven strategy, these others are business-driven, highlighting a significant shift in priorities.<\/p>\n

As the generational shift from baby boomers and Gen X to Millennials and Gen Z expands, the need for new products will intensify. And with the continued growth in InsurTech investment in MGAs and Insurer startups and emergence of InsurTech Unicorns, we should anticipate continued focus on the speed of innovation areas, particularly with the pending launch of AM Best Innovation Ratings, which we discussed in our last blog<\/a>.<\/p>\n

Knowing: Understanding Internal and External Challenges<\/strong><\/h2>\n

Over the last five years, we have tracked insurers\u2019 levels of concern about specific internal and external challenges. This year we added two new internal challenges including change management<\/strong> and innovation<\/strong>, and 1 external challenge, market availability<\/strong> of new, innovative products and services.  Amongst all 17 challenges, innovation<\/em><\/strong> stood at the top, highlighting the growing focus by insurers. <\/em><\/p>\n

Internal challenges dominated in priority with 8 of the top 10 (two tied for the 10th<\/sup> spot) as compared to 3 of the external challenges.  Similar to last year, there continues to be a higher focus on internal versus external challenges \u2013 posing an underlying potential threat for insurers because new competitors like InsurTech are taking an \u201coutside in\u201d approach to their business model, products and services to more readily address customer and market demands.<\/p>\n

By tracking these challenges over the last five years, we can view the overall trends. For example, 10 of the 16 original trends dropped in priority from 2019, generally realigning to 2018, and 5 remained the same with only one increasing slightly year over year.  Data and analytics<\/em>, talent<\/em> and new regulatory requirements<\/em> experienced the largest drop. Other findings include:<\/p>\n