Simultaneous Need for Growth and Profitability
Insurers today must simultaneously rebuild capital and grow revenues. That means evaluating their existing business models and product offerings in order to achieve the optimal use of scarce capital, according to Hollander. The CIO's imperative is this "do more with less," which involves not merely efficiency, but more effective ways of performing business functions. At a time when insurers must move toward a more comprehensive view of cost reduction, CIOs need to focus on the ways technology can support core operational transformation. "Partnering with the business and understanding business priorities will be key to the prioritization and execution of these critical initiatives," Hollander says.
Increased Focus on the Customer
Virtually all insurers are moving toward a more customer-centric view of their products and services, and technology is a critical enabler of novel approaches to customer segmentation, of retention strategies and cross-sell strategies, and integrated and cross channel customer servicing, according to Hollander. Simply put, technology is the means for insurers to deal with customers anywhere, anytime, on their terms. Many insurers are struggling to find the right organizational structure to enable and improve multichannel distribution and deliver a consistent customer experience, and the CIO should act both as enabler and consultant, Hollander implies. "The use of mobile technologies to empower customers will be an important portion of the CIO's agenda," Hollander affirms.
Increasing Regulatory Demands
Insurance management teams will confront several key challenges related to what Hollander terms the complex and changing accounting, regulatory and tax regime environments in which they operate in the wake of the financial crisis, Dodd-Frank and healthcare reform, and in anticipation of the NAIC's Solvency Modernization Initiative and Europe's Solvency II. He comments: "This will have a significant impact on existing technologies and the technology transformation roadmap."
Competing on Data Analytics
Whether or not insurance can be said to have truly entered the era of "Big Data," insurers need to get better at data analysis across the enterprise, Hollander suggests. They need more detailed and reliable information internally to manage their business, he says, and they must review their information strategy with regard to the potential of an increasingly wide range of external sources of data. "The concept of chief data officer will be a key organizational tenet that the CIOs will have to come to grips with," he predicts.
[For more on insurance CIOs top challenges, see 8 Ways Insurance CIOs Can Maximize Success — Novarica.]