Insurance Shifts Driven by People, Technology, Market Boundaries: Majesco Research
Staff Writer | February 27, 2017
Majesco published a new thought leadership report, Future Trends 2017: The Shift Gains Momentum, which provides a framework of three forces—people, technology and market boundaries—that are rapidly creating new expectations, new innovations, and new competition for the insurance industry. Based on a continuous scan of the market, the three forces expanded with several new trends.
Insurtech, behavioral economics, the pay-as-you-need enterprise, platform solutions and competition for talent and capital were added to the three forces, resulting in 14 key trends that are significant influencers of change and disruption for the insurance industry. These forces and trends are converging and pushing a slow-to-adapt industry into the digital age, while challenging the traditional business assumptions, operations, processes, and products of the last 30 or more years.
The implications for traditional insurance business models is enormous because the models, processes, products, services and systems have all been built for and around traditional assumptions rather than a market with new buyer expectations, new competition and new technology underpinning the shift.
“Insurtech has introduced innovative new models that are challenging traditions and capturing the hearts and minds of buyers for their ease, transparency, and engagement. We believe existing insurers will increasingly introduce new greenfields and startups to compete, leveraging the range of trends to compete for the next generation of buyers,” says Denise Garth, senior vice president strategic marketing, industry relations, and innovation at Majesco. “A key part of this new model will be the pay-as-you-need enterprise that leverages a SaaS Platform model that provides agility, innovation and speed, critical attributes in a fast-changing market.”
The report notes that in 2017 we expect to see existing insurers and reinsurers increasingly looking for paths to grow their businesses by capturing the next generation of customers with new engagement models, products and services. Rising to the competitive forefront, however, requires companies to rethink their business models and realign them with the customer needs and the expectations of those who will be their customers for the next 10-20 years, not those from the past 10-20 years.
To adapt to this shift, the report notes that insurers are charting a path with the following:
- Maintain and grow the existing business while transforming and building the new business. The current business is funding the future and needs to be kept running efficiently and effectively as the market shifts.
- Optimize the existing business while building the new business. Optimizing any process will help to maximize the existing business, reduce the cost of doing business, and provide a bridge from the past to the future while allowing realignment of resources and investment to the new business.
- Develop a new business model for a new generation of buyers. Create a strategy and plan for a new business model that supports simultaneous leaps forward to create new customer engagement experiences underpinned by innovative products and services that offer growth, competitive differentiation and success in a fast-changing market dynamic.
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The Email Chat is a regular feature of the ITA Pro magazine and website. We send a series of questions to an insurance IT leader in search of thought-provoking responses on important issues facing the insurance industry.
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