Achieving Competitive Advantage in the Insurance Industry with Technology

ACORD recently published survey results on the Insurance Industry technology priorities.  A resounding them was that technology will become even more important to the success of an insurance organization by 2040. 

When it comes to what respondents thought would give them a competitive advantage, leveraging technology was a clear winner.  Currently, 27% of respondents feel that leveraging technology provides them with a competitive advantage.  However, when asked what their expectation for 2040 was, a whopping 45% feel that technology will be a deciding factor in whether they will have a competitive advantage in the market.

The survey indicated that by 2040 the use of technology for operational efficiency to achieve competitive advantage would decline in the Insurance Industry.  They go on to state “operational efficiency and excelling in core insurance functions (underwriting and claims) may not be the key to driving superior performance” (ACORD).  The takeaway here is that this can be ignored but that by 2040 everyone will have implemented solutions to deliver operational efficiency and therefore it will not provide the competitive advantage anymore.  Stated another way, just to be in the game will require organizations to implement operational efficiency via technology.

Some other key takeaways were that the following will increase in priority in the next 20 years:  Data & Analytics; Attract/Develop/Retain Talent; System Consolidation.  Decreasing in priority for companies will be Omni-Channel Capabilities and Cloud-Enabled Efficiencies.  Cybersecurity and Risk Management is of high importance today and will remain so in 20 years.

The survey also revealed that everyone in the organization (C-Suite and down) will need to have strong technical acumen and will need to be able to leverage it to succeed.  To wrap up and not surprisingly, technology is expected to play an increasing role in Insurance organizations for the next couple of decades.  To see the ACORD results for yourself, visit https://www.acord.org/docs/Insurance2040