There is a meme doing the rounds on LinkedIn; it’s a multiple-choice question that asks who led the digital transformation of your company. The answers are “CEO,” “CFO,” and “COVID-19.” COVID-19 is highlighted in red marker.
It’s a look at one potential upside of this crisis, hinting that companies might emerge on the other side in better shape than they entered.
Insurer conversations thus far have been of the crisis management variety—keeping the lights on and enabling remote work. For the most part, business continuity efforts have run their course, and carriers have settled into a new normal. Some carriers had such a wildly successful shift that IT has emerged as a hero with new political capital to burn.
As Novarica’s CEO and President Matthew Josefowicz and EVP Rob McIsaac have discussed recently, insurers should be looking at their next steps. In some cases that will mean reevaluating entire technology strategies. In others, insurers may focus on refining their operations and implementing specific lessons learned.
What Happens Next
While discussions around tightening the belt are inevitable as the economy contracts, smart insurers will be on the lookout for opportunities for strategic investment as well. Those that do this thoughtfully will emerge ready to take full advantage of whatever the comes next.
There are a couple of converging upsides to consider. One is that by the end of this, insurers can be excellent at remote work. The second is that with unemployment reaching record levels, the labor market will be awash with new candidates, many of whom have skills that were almost impossible to find before. They may not be geographically convenient, but that matters less now.
The following areas deserve strong consideration for investment:
- Basic Data. It’s shocking how many carriers don’t have their basic data capabilities right. Many today are guessing at how bad their KPIs are, and they are in no position to develop reliable analysis about where things will be a month or two out. Lack of immediate and widespread access to insight from data is a critical shortcoming, and improved competency here will be well rewarded in the coming months.
- Advanced Data. Many insurers with basic capabilities in place still struggle with their big data and data science initiatives, even though the potential value here is huge.
- Cloud. Most carriers understand that cloud is the future yet lack the cloud expertise necessary to move as fast as they might like to. Provisioning, securing, and managing cloud effectively require deep technical expertise that takes a long time to develop internally.
- IT Automation. DevOps, QA, and RPA are opportunities for carriers to replace manual processes with less expensive, more reliable automation. Investment here is a path to “tightening the belt” while increasing the organization’s ability to execute on strategy.
- Digital and Marketing. Digital receives attention as carriers look to replace antiquated paper-based processes, now more than ever. While crisis workarounds are fine in the short term, longer term solutions will require expertise that carriers may not have today. Capabilities related to digital marketing are also in short supply at carriers and will be of especially high value as consumers (permanently) shift their interactions to the internet.
The most daunting challenge in all these areas is finding leadership and practitioners with expertise in relevant theory and technology. While these individuals will still be in high demand (even during this downturn), availability should improve (some employers still mistakenly view these areas as discretionary rather than mandatory).
Insurers with an eye to the future will recognize that strategic IT is not an area to be tightening the belt. Instead they will use this opportunity to increase investment in areas critical to future competitiveness.
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