The insurance industry is undergoing forcible change. Technology continues to drive business into digital channels, customer expectations increase, and InsurTechs enter the market. To avoid losing equity in prior technology capital investments - and to support the creation of digital insurance environments - insurers’ systems and IT architecture must be modernized, and their disparate systems and data sources integrated.
A recent report from Gartner, 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 internal corporate cultures – that will influence and reshape businesses’ futures.
Four Scenarios for Insurance Industry Transformation
For business and IT leaders at established insurance companies, plans for the future must account for the pace of change in both technology and market conditions. Gartner’s insurance analysts found that scenario planning enables decision-makers to have better immediate and longer-range strategic discussions.
Gartner has identified four different scenarios for business transformation that insurers should consider incorporating in their long-term planning. This has been compiled into a scenario planning document to serve as a roadmap for CIOs. Each scenario takes into account both corporate culture – Traditionalists versus Futurists – and market volatility – ranging from low to high. The Traditionalists are Administrators and Adapters, and the Futurists are Pioneers and Disruptors.
In this blog, we’ll take a look at the characteristics of the Traditionalists and touch on what could change for them by 2030.
Risk-Averse Administrators and Pragmatic Adapters
For Traditionalists, corporate culture is fairly old-school. They have a centralized foundation for decision-making, a 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 containing 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 might change the competitive landscape. Additionally, Administrators need to keep an eye on how digital technologies can help them improve operational efficiencies, because their competitors will be doing the same.
In contrast, 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 sacrificing the stability of their current technology landscape. To achieve this, they must 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.
Collaborative Planning to Prepare for an Uncertain Future
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.
If you’re ready to learn more about scenario planning and how it can help insurance decision makers understand uncertainties and anticipate long-term outcomes so they can make better near-term and long-range strategic decisions, you can download the report here.
Visit our Appian Platform Page to learn more about the benefits of a low-code digital platform. You can also download our Streamlined Underwriting use case to get an idea of how far the platform’s capabilities can be extended when you enlist the help of industry experts.