The insurance industry is undergoing forcible change, as technology continues to drive business into digital channels, customer expectations increase, and InsurTechs enter the market. Insurers' systems and IT architecture must be modernized, and disparate systems and data sources integrated, to avoid losing equity in prior technology capital investments and to support the creation of digital insurance environments.
A recent report fromGartner, Insurance 2030 Scenarios Update: CIOs Need Greater Adaptability to Survive and Thrive in an Era of Ongoing Industry Transformation, explores the macro external forces - and companies' internal corporate cultures - that will influence and reshape their businesses' future.
For business and IT leaders at established insurance companies, planning for the future must take into account the pace of change in both technology and market conditions. Gartner's insurance analysts have found that scenario planning enables decision-makers to make better near-term and long-range strategic discussions.
Gartner has identified four different scenarios for business transformation that insurers should consider as part of their long-term planning, and has compiled a scenario planning document as a roadmap for CIOs. These scenarios take into account both corporate culture - Traditionalists versus Futurists - and market volatility - from low to high. The Traditionalists are Administrators and Adapters, and the Futurists are Pioneers and Disruptors.
This week we'll take a look at the characteristics of the Traditionalists - and also touch on what could change for both by 2030.
For Traditionalists, corporate culture is pretty old-school, with centralized decision-making, slower adoption of new technologies, and a structured project life cycle.
The Administrator scenario develops when insurers with more risk-averse cultures anticipate operating in a market environment with little volatility, combined with the confidence of stable relationships with customers, intermediaries and other business partners. It is not likely that they'll be forced to change quickly.
2030 Snapshot: Even insurers counting on stability will still need to make sure that they monitor external factors that can change the competitive landscape. Additionally, Administrators need to keep a an eye on how digital technologies can help them improve operational efficiencies, because their competitors will be doing the same.
To contrast, this, the Adapter scenario emerges when an insurer with a traditional corporate culture has to deal with a more volatile market environment. For Adapters to be successful, they need to embrace innovation without without sacrificing the stability of their current technology landscape, and be selective in choosing new technologies to integrate into their ecosystems.
2030 Snapshot: Digital business technologies and platforms, along with emerging technologies like Artificial Intelligence (AI) and blockchain, have the potential to take Adapters by surprise. They need to closely monitor the business environment going forward and understand when adoption tipping points are reached.
Gartner's insurance analysts, along with their colleagues from other Gartner business units, including consulting and executive programs, have conducted a comprehensive set of scenario planning exercises to help Life and P&C CIOs plan for the future.
Next week we'll take a deeper dive into the Futurists, and learn more about the Pioneers and Disruptors.
Insurance Industry Marketing Manager
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