Jean-Baptiste Alphonse Karr, the French journalist and novelist of the early 19th century, first coined the phrase, “the more things change, the more they stay the same,” a satirical response to French politics in his era.
He was referring to the notion that while some things change during turbulent times, the underlying status quo usually stays the same. The same might be said of the insurance industry over the past several years, as the introduction of new technological capabilities competed with the industry’s ability to effectively absorb and leverage them.
However, in 2015 the industry began to turn that corner as more insurers made progress toward, or completed, their core system modernization efforts.
That fact has the potential to enable the industry to continue to make good technological progress in 2016. More specifically, there are a few areas of technology that hold promise for the industry as 2016 begins.
On the following pages, here are five tech trends the insurance industry will see in 2016:
1. Advanced analytics and customer centricity
As part of the larger trend around big data turned into actionable analytics, insurers will begin to reap the benefits of those efforts in 2016.
The big idea behind big data and the analytics and modeling it spawns is the notion of customer centricity as the new North Star for insurance carriers.
That’s a significant change with many implications, but at its core it is a recognition by carriers that their orientation needs to change 180 degrees, from inwardly focused to externally focused.
That is difficult to do without the benefit of the kinds of information that allows insurers to know their customers much more intimately than they ever have. The payoff for doing so is big. Increasing customer knowledge is a fundamental part of providing an effective omni-channel experience and allows insurers to identify opportunities for cross-selling products and services that they have not had the ability to identify in the past.
This will be important in 2016, as consumers will increasingly dictate the terms of engagement with their insurance companies, a fundamental change in the industry.
2. Digitization and portal development
Another important area for insurers in 2016 — and one that is part of the macro trend of external technological developments imposing themselves on the industry — is continued digitization and the pressure that puts on carriers to improve their digital capabilities, particularly with portals and mobile applications and services.
This marks a shift from the industry’s emphasis on websites over the past several years, which to millennials and other influencing demographics of customers are just too inconvenient to use.
Insurers have begun to catch on to the idea that their customers of the future will be channel agnostic, or better yet ,will tell their insurer what kind of channel they’ll use and when they’ll use it.
That’s a big change for the industry. It’s a change that is coming, though, and those insurers who dedicate the time and resources to it in 2016 may find themselves at the head of the line for their customers of tomorrow.
3. Cloud and software as as service
As part of the same pivot toward customer centricity and digitization, insurers will accelerate their use of cloud-based solutions, including software as service and infrastructure as a service offerings.