Building Bridges: The Future of Insurance
Staff Writer | August 30, 2016
Strategy Meets Action will hold its annual Summit in Boston on Sept. 19. The focus of the event is on becoming a Next-Gen Insurer—bridging from today’s world to the future of insurance. SMA founder, Deb Smallwood, agreed to answer a few questions about the Summit and important issues facing the insurance industry.
ITA: We’ve all been discussing change and transformation and how important it is for insurers. What's the status of it today?
Smallwood: Change is certainly ongoing. And there is no end in sight. It is coming at us faster than ever and from multiple sources. Since none of us has a crystal ball, we can't predict the pace of change or what those changes may be is the future. But it is essential that insurers be prepared and position themselves for success. It is a time to be proactive not just reactive.
Next-Gen Insurers need to be able to bridge the traditions of insurance to the emerging trends and technological innovations happening all around us. That is our focus this year at the SMA Summit. We will be discussing and showing real examples of these transformative initiatives and how insurers have embraced transformation.
ITA: What are the steps you see as critical to becoming a Next-Gen Insurer and making this transformation real?
Smallwood: We’ve identified several steps that insurers need to incorporate into their strategies in response to all of the industry and external stimuli. For example, insurers should operationalize customer-centric strategies. Emerging technologies and the connected world have had, and will continue to have, a major impact on customer needs and behaviors. Insurers must be ready and able to respond.
Other areas include modernizing core platforms, building a flexible organization and workforce, institutionalizing innovation, and keeping your finger on the pulse of emerging trends and technologies.
These closely relate to our SMA Next-Gen Insurer framework, which focuses on four interrelated elements: creating a strategic plan that starts with customers, establishing capabilities to develop innovative products and services, adapting and capitalizing on technologies and data, and implementing new and revised business models.
ITA: You’ve mentioned bridging several times and that’s clearly a focus of this year’s SMA Summit. How does this fit into insurer strategies?
Smallwood: Yes, bridging is definitely critical in today’s world. Insurance is built on tradition—the industry has its traditions; individual companies have their traditions. One of the resulting positives is that the industry and insurers are financially strong. But there is a fast changing new world, surrounding us on all sides, bombarding us with new technologies, capabilities, and big data availability.
Insurers need to step into that world by building bridges over the divide between tradition and innovation so that they can take advantage of the new possibilities. Insurers can no longer procrastinate or ignore what is happening all around insurance. At the same time, they don't want to start from scratch. And that's where bridging comes into play.
Insurers need to ask the “how” questions. How can they build bridges between tradition and today? How should they make preparations for the future? How can they take action and become forward-thinking Next-Gen Insurers? How can they ensure that they are competitive in today’s world? That is the focus of Summit this year. Our innovation partners from SVIA and ITL will be leading some of the sessions and helping us all open up our thinking to create the bridge that is right for your company.
ITA: A couple of other key terms that appear throughout the SMA Summit program are transformation, innovation, and connecting. How do those reflect today’s industry?
Smallwood: Those terms all reflect what is happening at this moment in time, for all of us, as an industry as well as a society. Things are irreversibly changing, and we are all a part of it. Technology such as the connected home, connected cars, smart cities, and the IoT are opening up a whole new world of capabilities and data sources. It is up to the industry to harness all that is new and find ways to leverage it to benefit the industry, and most importantly, the customers they serve.
If risk is reduced through monitoring home systems such as water heaters or ovens and stovetops to prevent disaster, everyone benefits. If a driver’s data shows that he or she is a good and competent driver, insurers can not only provide them with discounted pricing as they do today, but can provide other value propositions such as safety advice and theft deterrence so that everyone benefits.
The discussions at the SMA Summit sessions will be about how companies are out there today—doing amazing things, being innovative in their approaches, and bridging their traditions to today’s new and evolving world. They are showing not only that it can be done, but that it is being done – right in front of us. The Summit will help insurers go from witnessing changes to being agents of change.
ITA: And that’s reflected in your award winners as well.
Smallwood: Absolutely. This year, we’ve changed the SMA Innovation in Action Awards program to allow the recipients to share their accomplishments during our program, which we think will inspire others. It is remarkable to see so many great projects going on out there today and how insurers and solution providers are creating solutions toward becoming a Next-Gen Insurer. They are taking their visions and, through hard work and resourcefulness, bringing them to fruition. Our awards are an opportunity to recognize these efforts, and we look forward to hearing from all of the winners during the Summit.
ITA: Core system … the foundation of carrier activities. How do they fit into the new world we’ve talked about?
Smallwood: Core modernization is on the radar of most insurance companies, as shown in a recent SMA report. Modern core platforms are critical to becoming a Next-Gen Insurer because they increase speed-to-market, efficiency, and effectiveness, as well as providing the foundation for truly digital interactions. And insurers know how critical this is. The research shows that 74 percent of insurance companies are investing in core system replacement in 2016. This is another area that we'll be addressing at the SMA Summit—preparing and moving beyond core modernization initiatives.
Insurers interested in attending the SMA Summit can contact Deb Smallwood at 603-770-9090 or firstname.lastname@example.org.
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