Gartner, Inc. has identified 10 technologies that will have the greatest impact – positively and negatively — on the life insurance industry.
“Life insurers are under considerable pressure to reduce operational costs, retain customers and improve operations effectiveness through strategies such as straight-through processing (STP),” said Kimberly Harris-Ferrante, vice president and distinguished analyst at Gartner. “To recover, it is imperative that insurers balance operational efficiency initiatives with those targeted at protecting brand image, strengthening distribution and improving product development processes. Using a combination of new technologies, process improvements and organizational transformation, insurers can reinvent themselves, shift business models and align with emerging customer demands.”
The 10 technologies that have the greatest impact on the life insurance industry include (in no particular order).
Web Services and SOA Tools
Rather than simply using application integration and middleware, more life insurers are developing service-oriented architecture (SOA) strategies and using a combination of Web services and SOA tools to expose business attributes and processes, to use tools like enterprise service buses, and to execute standardized services across the company. Improved interoperability across product lines and business applications will help companies be more flexible and agile, enabling them to better respond to changing market conditions.
Business Intelligence and Analytics
Innovative and visionary life insurers are increasingly adding more business intelligence (BI) and analytics capabilities to gain heightened intelligence into operational, customer and underwriting trends, as well as improve their regulatory reporting capabilities. Having more-powerful analysis capabilities will aid life insurers in risk avoidance, improved underwriting profitability, better customer intelligence (including customer segmentation, life stage analysis and profitability metrics), and more-accurate marketing and campaign management.
BPM Solutions, Including Workflow and Rule Engines
Life insurers have been using tools to help manage business processes for several years, but projects traditionally have focused on workflow without leveraging the complete capabilities in these systems. Today, companies are focused on the improved automation of tasks, such as underwriting, full case management to support end-to-end tasks, employee productivity tools, and process metrics. Business process management (BPM) holds promise for insurance, because it enables companies to model, analyze and test business processes independent of core systems. Process problems can be easily identified, and companies can manage process variety (offering various processes for a single task for different user groups).
Sales and Customer Service CRM Solutions, Including SFA, Lead Management and Call Center Applications
Customer relationship management (CRM) has been a growing priority among life insurers during the past 10 years. However, unlike the early days when suites were the primary solution option, insurers are now opting for targeted solutions to support vertical processes unique to managing field sales, agent and broker management, and customer service via the call center. By employing CRM, life insurers can improve the relationships with their sales network, enhance sales efficiency and improve customer experiences. Empowering the channels with more customer information (including customer analytics and a whole view of the relationship with the customer) and tools to assist in the sales process, insurers can drive more profitability in sales and customer service processes.
New Business and Sales Automation, Including Illustration, Electronic Applications and Electronic Signatures
To improve sales transactions, insurers will also need to focus on the transaction itself. Ensuring fast and efficient policy issuance processes will aid life insurers in closing the sale quicker — which will mean faster revenue recognition, faster payment of commissions to distributors and less time for prospects to search for other options. STP will require a combination of process automation, process streamlining, and new technologies to support tasks such as illustration, electronic applications and electronic signatures.
Web 2.0 and Social-Networking Technology
Rather than taking an aggressive approach, most insurers are more passive and are monitoring Web activity, rather than building content. Life insurers should improve their understanding of how social networking will have an impact on their business in the long term, including as a customer complaint channel, for competitive intelligence, as a marketing channel and to interact in a community setting with distributors. Social networking may possibly have a disruptive impact on the industry as it increasingly becomes a trusted source of advice among consumers.
Product Development and Configuration Solutions
One of the top business priorities among life insurers is improving speed to market for new products, with growing interest in improving product quality, including pricing accuracy and better fit to customer needs. To do this, companies need to adopt strategies, such as product life cycle management, and enable tools that will enable easier access to the rules and content of the product itself. Product configurators will help drive down product development cost but, more importantly, will allow insurers to get products to market faster than their peers that continue to rely on legacy systems.
Customer Information Management Solutions, Including Customer Analytics
Customer information management is critical to understand the breadth of relationships with customers, the value of customers, and customer needs and preferences. It is imperative that insurers aggregate their customer information to fulfill these projects and drive tighter relationships with customers. Without having this, insurers are crippled, not being able to make accurate decisions on how to treat customers, ensure customer value, improve marketing and sales effectiveness, ensure positive customer experiences, and protect their customer base from churn. Customer intelligence must be in place, and will be a strategic asset for companies that complete customer data integration and apply customer analytics to their customer data.
Portal and Internet Technologies
As consumers increasingly use the Internet for communication and interaction, life insurers have had to take a more aggressive approach to e-business. Starting with their agents/brokers, insurers have launched portals dating back to the 1990s, and have made basic websites where consumers can find more information on products, or locate offices or phone numbers for contact. Using Internet sites as an interaction and transaction tool will help companies reduce transaction costs, improve the user's experience and satisfaction, and reduce call center volume. This will result in cost savings, attract online shoppers wanting to buy new products and help prevent customer turnover.
Mobile devices have become commonplace in the consumer lifestyle. Using these devices to communicate and interact with employees, agents/brokers and customers will increasingly become a key imperative in the life insurance business. Internal users and agents/brokers will have the highest demand and the most applicability. Using mobile devices to get customer information, real-time alerts, performance dashboards and access to transactional systems will be expected in the next five years. Sales and service tools (including access to sales force automation [SFA] solutions, new business and illustration applications, and billing systems) will need to be enabled through handheld and mobile devices.
Additional information is available in the report “Top 10 Technologies With the Greatest Impact on the Life Insurance Industry” which is available on the Gartner web site at http://www.gartner.com/resId=1368620.
Gartner, Inc. (NYSE: IT) is the world's leading information technology research and advisory company. The company delivers the technology-related insight necessary for its clients to make the right decisions, every day. From CIOs and senior IT leaders in corporations and government agencies, to business leaders in high-tech and telecom enterprises and professional services firms, to technology investors, Gartner is the valuable partner to clients in approximately 10,000 distinct enterprises worldwide. Through the resources of Gartner Research, Gartner Executive Programs, Gartner Consulting and Gartner Events, Gartner works with every client to research, analyze and interpret the business of IT within the context of their individual role. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, USA, and has 8,300 associates, including more than 1,800 research analysts and consultants, and clients in more than 90 countries. For more information, visit www.gartner.com.
Comments or opinions expressed on this blog are those of the individual contributors only, and do not necessarily represent the views of Gartner, Inc. or its management. Readers may copy and redistribute blog postings on other blogs, or otherwise for private, non-commercial or journalistic purposes. This content may not be used for any other purposes in any other formats or media. The content on this blog is provided on an "as-is" basis. Gartner shall not be liable for any damages whatsoever arising out of the content or use of this blog.