Other parts of this series:
In a previous post, I introduced Accenture’s Future Systems research—our largest systems survey ever—where we studied technology “leaders” and “laggards” from more than 8,300 global companies across 20 industries, including insurance. It became clear that industry leaders’ approaches to technology not only drive higher revenue growth, but also sustainable value compared to laggards.
We’re seeing this play out in the insurance industry where leading insurers’ investments in technology consider the benefit to the broader insurance organization, particularly when it comes to their core life and annuity management systems. Life and annuity carriers typically operate separate lines of business (LoBs), each often having its own distinct operating model and supporting technology. Today, insurers are questioning the wisdom of such models and beginning to break down the technology silos that result. They are uncovering sustainable value that’s also enabling them to scale innovation.
In a recent collaboration with one leading life insurer, we built a digital ecosystem for its direct-to-consumer business. The goal was to simplify its IT environment leveraging cloud technology to enable the carrier with greater speed and flexibility to underwrite high-volume, low-face-value policies. Looking across its enterprise, the insurer discovered that another LoB had a similar goal for its high-face-value policies.
Key actions insurance industry leaders take to scale growth and innovation
The project demonstrated four of the five key actions outlined in our Future Systems research that leaders take to drive sustained value from their technology investments.
- Adopt technologies that make the organization fast and flexible
- Get grounded in cloud computing
- Recognize data as being both an asset and a liability
- Manage technology investments well—across the enterprise
This insurer is advancing the speed and flexibility required to operate both LoBs, as well as using the cloud to simplify its IT environment and drive profitable growth. Laggards would have stopped at addressing the immediate objectives, a decision that could limit the ability to scale later. By adopting a single flexible technology platform for both LoBs, the carrier could adapt its system to meet the unique needs of each LoB—process applications in minutes for its low-face-value policies and optimize underwriting resources and costs for its high-face-value policies.
Adopting a cloud-based flexible technology architecture served as the platform to help this carrier sustain value by scaling growth and innovation. They applied technological advances in underwriting and automation and leveraged data to improve underwriting accuracy and profitability across two distinct lines of business.
Shifting the mindset from “insurance systems of record” to “future systems of innovation”
Our industry is ripe for change. According to research and advisory firm Gartner[i], 99 percent of insurance respondents surveyed indicated that they had either already modernized, are in the process of modernizing, or plan to do so over the next year. And of those surveyed, half believe that a modern system is more than a system of record—it’s a system of engagement or innovation.
At Accenture, we share a similar perspective among many of our clients with whom we’ve collaborated to establish a future systems approach to modernization, one that is helping them scale innovation to achieve full value from their technology platform. We invite you to do the same. Contact us to learn more.
[i] Insurance CIOs Have Core System Modernization on Their Agenda, Richard Natale and Peter Delano, December 23, 2019.