Whatever insurers have planned to improve processing, the success of their projects will depend on the quality and availability of data. Consequently, they will invest in a variety of data-related technologies, including data warehouse, data storage and metadata initiatives, according to Karen Pauli, research director, insurance, TowerGroup (Needham, Mass.). "It's not possible to execute any meaningful strategies or comply with regulation without getting data into usable condition," she comments.
In order to drive greater precision in risk management, insurers will pursue master data management (MDM) solutions, says Scott Mampre, VP in Capgemini's (New York) insurance practice. Insurers have made limited progress in liberating data captured in isolated spreadsheets and local databases, according to Mampre. "MDM solutions enable a consistent, unobstructed top-down view of risk across an insurer's divisions by breaking down operational barriers to achieve a seamless alignment of governance objectives, technology and disciplined data management processes," he says.
2. Business Intelligence and Predictive Analytics
Insurers are sitting on a gold mine of customer and operational data, and they are recognizing that they need unified business intelligence (BI) systems to be able use these insights to improve customer experience, develop new products and markets, and align resources to the point where the business performance is accelerating, says Ellen Carney, a senior analyst with Forrester (Cambridge, Mass.). "Hand-in-hand with the interest in BI, predictive analytics is helping insurers with premium and claims leakage by driving better underwriting decisions and helping root out fraud," Carney relates.
In the life insurance arena, carriers increasingly will use heterogeneous data to better predict mortality experience, producer success, lapse rates, propensity to buy and other leverage points, predicts Clark Troy, senior analyst, Aite Group (Boston). Across the industry generally, insurers will use predictive analytics to manage better through tough economic times, according to Matthew Josefowicz, director of New York-based Novarica's insurance practice. "Insurers continue to invest in better technologies in search of identifying profitable growth opportunities in a hyper-mature, contracting market," he asserts.
3. Open Standards Architecture
Carriers and distributors increasingly will look to open source technology in order to tap the cost advantages and negotiating strength that come from avoiding vendor lock-in, says Aite Group's Troy. "P&C insurers such as Geico and Travelers have taken the lead in implementing open source middleware solutions such as JBOSS, and Aegon Religare in India has been a pathfinder with its use of Linux-based e-mail," he reports.
As more organizations rely on external sources of intelligence to inform key business decisions, they will need open standards to enable easy interoperability among and further orchestration of an organization's core services, asserts Capgemini's Mampre. "Open standards will also become crucial in facilitating shared methodologies, frameworks, tools, and even certification of skills and competencies," he foresees. "In terms of service orientation, integrated service management platforms will become crucial to manage all the components of an organization's SOA services, which can be defined, executed, monitored and managed from one unified view."
4. Cloud Computing/SaaS
Many insurers remain skeptical about cloud computing's risk/reward proposition, but business still is likely to boom for cloud-based applications such as e-mail, CRM and even policy administration in P&C insurance, according to Chris Curran, a principal with PwC's Diamond Advisory Services.
After a year of cautious exploration around the cloud, insurers are becoming more comfortable with it as a tested deployment model, opines Michael Costonis, executive director, North American insurance practice, Accenture. "Look for CIOs to leverage cloud-based services up and down the stack, from infrastructure on demand to applications and services," he says. "This will also open a world of new vendors [e.g., Amazon and Google] to the insurance world."
Forrester's Carney sees cloud computing and software-as-a-service (SaaS) as means for large carriers to expand into external markets as they face stagnant growth domestically. "They've got to establish beachheads in new markets fast -- meaning the legacy 'we'll build it ourselves' approach simply isn't going to work," she explains. "Enter rapidly deployable SaaS options that provide multi-language and multi-currency capabilities pretty much out of the box that stay standalone or run the new business while IT integrates this new business into their legacy systems."
5. Social Media
Insurers' interest in social media will continue to develop in the coming year, but with a greater focus on B2B applications, according to Donald Light, a Palo Alto, Calif.-based senior analyst with Celent. Adds TowerGroup's Pauli, "Carriers that have dabbled with blogs will recognize that information in social media will take their customer insights to a whole new level if they integrate it with core systems and generate new information for new strategies."
6. Mobile Technology
Explosive adoption of smartphones and tablet computers such as Apple's iPad will continue to drive insurers' mobile strategies, according to Novarica's Josefowicz. "Internal uses will lead the way at most carriers, but direct writers will continue to push consumer-facing apps," he predicts.
"Life producers are a mobile group, and more and more of their CRM, quoting illustration and other functions will migrate to smartphone and tablet platforms," notes Aite Group's Troy. "Producers see the advantage and are responding to carriers' efforts in this area."
In the coming year, insurers will be taking mobile platforms "beyond the basics," deploying things such as disaster management apps to tap into the crowd to channel resources during a catastrophe, according to Diamond's Curran. "In addition, there will be further 'outsourcing to the customer' in areas such as first notice of loss, claims preprocessing and home inventories."