Property and casualty IT leaders came together in Scottsdale at the recent PCI IT Conference to discuss the technological good, bad, and ugly at their carriers and the IT capabilities they’re bringing to the table.
The challenges facing commercial lines carriers are many and manifest, and that has put increasing pressure on their business technology capabilities and IT divisions. Carriers are looking at their CIOs for innovation and leadership in a very competitive marketplace, and more specifically for the enablement of processes, information, and people that will provide some positive competitive differentiation. The PCI conference was an opportunity for IT leaders to compare and collaborate on such things, including success stories and cautionary tales.
The Good. P&C carriers continue to make good progress toward legacy modernization. A decades-long trend, modernization is picking up steam. Carriers that have heretofore put it off for expense or cultural reasons can no longer afford to do so as they strive for market competitiveness and industry relevance. Many carriers have also embarked on data and information strategies in order to support their modernization efforts and as a way to begin their journey into the promised land of advanced analytics.
The Bad. Many carriers are still grappling and struggling with an accelerating consumerization trend that is fundamentally reshaping their long-held relationships with policyholders, agents, and service providers. Megatrends such as social media, mobility, and the ubiquity of consumer information are quickly shifting the balance of power in relationships from the carrier to the customer.
Many insurers still seem ill prepared for a world in which brand loyalty and person-to-person interaction is replaced with virtual relationships and the demand for anywhere and anytime access to specific and relevant information. The best evidence of this at the conference was the number of sessions focused on dealing with mobile apps, virtualization, and information presentation. Progress is being made, but whether it's fast enough for some carriers to remain competitively viable remains to be seen.
And the Ugly. While it might not be quite fair to characterize the inevitable advent of the millennial generation as ugly, it does have ugly implications for those insurers who choose to ignore this seismic demographic trend. Several sessions at the conference focused on dealing with millennials as employees, customers, and future management leaders. It became very clear that while there may be a few carriers who have figured out how to leverage this opportunity, the industry as a whole has not as yet gotten their arms around these very different people.
As we learned, millennials want to collaborate and be collaborated with virtually, are fierce multitaskers, and travel and work in virtual packs — they draw no distinction between the virtual and the physical. Matching those characteristics to the current state of insurance carriers’ organizational principles and workplace values does not produce a pretty picture - that's where the ugly comes in.
These young people, all 79 million of them, are coming no matter what, and have already materially impacted such industries as entertainment, print, consumer goods, and technology with no end in sight. The biggest impact of millennials may end up being a few years off for the insurance industry, but it's going to happen. At PCI, the message to insurers was that their profitability and survival depends on being ready for them in the workplace and marketplace.
About the Author: Frank Petersmark is CIO Advocate at X by, 2 a technology company in Farmington Hills, Mich., specializing in software and data architecture and transformation projects for the insurance industry. He can be reached at firstname.lastname@example.org.