Insuranceciooutlook

The return to a (new) normal

Sotirios Pigas, Co-founder, improvITSotirios Pigas, Co-founder, improvIT
For most, 2021 is the year of the 'return to a new normal'; We believe that this year will be a transitional one in many ways.

There are several loose ends in the industry since many projects were disrupted by the pandemic, forcing insurers to focus on day-to-day operations in unprecedented conditions. A pragmatic approach to innovation is now more relevant than ever.

• Compliance

Before moving on to new ventures, insurers have to ensure that they have 'operationalized' their compliance requirements like GDPR, IDD, Solvency II, MiFID II, as well as many others, depending on their operating environment. 2020 was not a big help in that direction, and upcoming challenges like IFRS17 will produce even more pressure, leading insurers to adopt smarter and more effective tools.

We anticipate that in 2021 we will see significant enhancements to existing offerings, as well as new ones, which will provide the capabilities to improve the integration of complex, interdepartmental workflows with massive data exchange requirements.

• Core Systems

Cloud infrastructure is becoming the choice for most greenfield -and not only- implementations, so a cloud-first approach is becoming fundamental for Insurance Core Systems vendors.

Also, the 'ingestion' of recent innovations is essential. Insurers need systems with embedded capabilities in areas like flexible pricing, IoT data integration, Blockchain, Artificial Intelligence, out-of-the-box Analytics, and more.
With the pace of innovation in insurance increasing, core systems have to be as open and connectable as possible by delivering easy integrations via well-designed APIs and robust Enterprise Service Buses. Holistic services require seamless integration of external service providers in Health, Repairs, Home Automation, and more.

Also, insurers have to differentiate their services, but sometimes this is quite difficult and expensive using off-the-shelf software. Low-code or even no-code capabilities can help in this direction.

We expect to see many of the above embedded in new offerings, either from software vendors or even from collaborations between large insurance groups with technology service providers.

• Robotic Process Automation

RPA is a technology trend, which, when used wisely, can increase efficiency in cases that most other improvement efforts may have failed.

Insurers were ready to adopt RPA, but only a few managed to move forward beyond proof-of-value pilot projects. Now it could be the time to see more RPA initiatives being realized and put to real-life work.

We expect -and hope- to see more solutions with specialized insurance process templates that will accelerate these implementations and -why not- lead the way for processes redesign and optimization.

Having said that, at improvIT, we perceive RPA more like a makeshift solution, which can quickly provide process improvements and offer significant savings, without major systems overhauling or even replacements. On the other hand, its nearly instant ROI could become a 'blindfold' that delays innovation, which might bring insurers in a position where they find themselves quite behind in the tech playground in the future.

• Digital Customer Experience

Digital channels were pushed to their limits during 2020. After all, in many cases, they were the only way to work, buy, sell, and interact in general. This situation created an expanded audience of all ages, not only Millennials and Gen Z's.

Insurers who were behind in this area will surely face threats, sometimes existential ones. Consequently, we foresee many related implementations, often using accelerators like CX Enterprise Software Platforms.

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