Novarica’s move to an all-virtual 2020 events calendar has been a digital journey, one that we have had the unique opportunity to experience together with our Research Council members. Our Weekly Virtual Town Halls have become a great way for us to bring our insurer client and Council community together in a way that would have been hard to contemplate back in February. We have enjoyed learning from each other and improving our own digital experiences along the way. This represents a very powerful and flexible capability, which is one of many “silver linings” of the emerging New Normal.
Novarica will continue these sessions every Tuesday from 1-2 PM EST through midyear. Each week will focus on new and emerging issues related to the pandemic. Last week, a trio from Novarica’s senior team discussed the results of our most recent budgets and projects study, focusing on data related to plan revisions for this year and 2021.
Novarica’s CEO, Matthew Josefowicz, outlined the recent shift in business priorities away from speed to market toward resiliency as insurers begin to worry more about sustainability. He also reported on Novarica’s recent study, which found that insurers are prioritizing cost reduction more aggressively. However, they are not doing this by way of large budget cuts.
The study also asked insurers to respond to shifts in priorities. Life insurers have been forced to improve digital capabilities due to stay-at-home measures; 65% are prioritizing digital initiatives. While 35% of property/casualty insurers are doing the same, EVP Martina Conlon believes this is because property/casualty careers tend to operate roughly five years ahead of life carriers in terms of technology—they may have been better prepared for virtualized business processes.
Another finding was that P/C insurers are deprioritizing emerging technologies and focusing on low-hanging fruit, such as improving digital claims payment capabilities and underwriting processes. Life insurers, on the other hand, are reprioritizing innovation—some are exploring areas they were previously underinvesting in. With these changes in budgets and priorities, staffing plans actually seem to be remaining consistent. Carriers are instead looking for savings in operations efficiency and cost reductions to avoid impeding their abilities to rebound in 2021.
The discussion also focused on what these revisions could mean for the industry as well as what changes insurers may expect to see down the road. For example, insurers looking to speak with digital solutions vendors may experience Zoom-style log jams. IT outsourcers may see demand grow as their BPO counterparts, historically focused on supplanting manual processes, struggle to cope in the virtual world. Another developing trend is more efficient partnerships between carriers and vendors. With virtual meetings now the default way of collaborating, insurers are reporting improvements in their work with vendors.
There are ripples from the crisis that have yet to be felt by the industry. Insurers are planning for a wide variety of outcomes, from supporting company culture virtually to planning staggered returns to the office. Novarica has enjoyed discussing the options that lay before us as well as best practices in implementing these options.
The full recording of this session, and the associated presentation materials, can be accessed here.
Later today, Novarica will further discuss the impacts of this pandemic and focus our discussion on driving change during the pandemic. We will be joined by three CIO panelists, and we look forward to discussing how carriers plan on making the most of the opportunities presented by the current crisis. Registration for this and all future Town Hall sessions can be found here.
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