What’s going to be important in life insurance technology in 5-10 years?
No matter how technology evolves throughout the next decade, it will increasingly be used to serve business needs rather than focusing on traditional IT concerns like reducing technical debt or upgrading to newer versions. More than ever, technology investments will be made in those solutions and projects that move the needle the most on insurer’s top priorities.
Approaches that accelerate product innovation, eliminate legacy manual processes and supercharge digital CX will gain even more traction.
In our recent Life Accelerated podcast, host Anthony O’Donnell of Insurance Innovation Reporter explored the future of the industry with our guest speaker, Principal Analyst at Forrester, Ellen Carney. Over the next 5-10 years, Ellen predicts increased application of three core technologies that will solve the industry’s biggest challenges.
1. Cloud adoption
The number one inquiry Forrester gets from all insurance stakeholders today is about how to become more nimble and how cloud strategies support that. In the past few years cloud adoption has become almost universal in the industry with very few new solutions being installed on premises.
This is because cloud offers scalable, secure speed to market. For companies who are asking how they can be more agile and take advantage of all the capabilities of the latest digital technologies, cloud is the obvious choice. They don’t have to worry about large up-front costs, version control or how their data will map across systems.
What are the benefits of the cloud?
For large Tier 1 and 2 carriers, cloud-based hosting means new systems can be stood up more quickly and at a lower cost. For smaller outfits, like fraternals, the main benefit is not needing a big infrastructure and resource allocation to manage their digital transformation.
As we look further ahead, we’ll see that total cloud-adoption will level the playing field in terms of the technological capabilities of big and small insurers. Everyone will have access to the most current insurtech, hosted in the cloud and likely operated within a SaaS model.
Another technology that has taken over in recent years is the Application Programming Interface (API). These intermediaries between applications and systems integrate our increasingly componentized IT ecosystem.
Ellen Carney, Principal Analyst, Forrester
As developers increasingly move away from ‘monolithic’ software solutions and focus more on micro-services and modular offerings, these integrations that govern how data is passed back and forth between nodes in a connected system become increasingly critical.
Going forward, insurers are increasingly choosing ‘best-of-breed’ solutions from the wealth of insurance technology offerings coming on the market every year. They may choose a claims solution from one vendor and underwriting tools from another. Data is exchanged between policy admin systems and portals and third-party vendors. APIs enable all that to happen. In real-time.
Over the next ten years, APIs will advance the industry’s capabilities when it comes to networking data and applications together to find novel solutions to enhancing insurance experiences for customers, agents and brokers.
3. Low code no code
Increasing the velocity of insurance business processes and development is going to be a hallmark of IT evolution over the next ten years. The current low code, no code revolution will be a foundational element in that evolution.
Low code, no code solutions will enable more and more ‘citizen developers’ to create solutions to important business challenges‒taking the pressure off overburdened IT teams. In a landscape where professional developers are in increasing short supply, this ability for those closer to the business needs to create their own solutions, will be invaluable.
Time to market will shrink like never before.
At the same time, innovation and flexibility will soar.
As Carney pointed out, its value lies in more than just being able to speed up the configuration of off-the-shelf systems. Low code, no code solutions could also be used to rapidly test new concepts. Systems can be quickly configured to try out new product ideas before they are, in Ellen’s words, ‘released to the mother ship.’
In the next five years we will see these tools harnessed to greatly increase business process automation and optimize workflows, driving superior customer experience.
Cloud-hosting, APIs and low code, no code will continue to be drivers of digital transformation for life insurers over the next decade. They open up possibilities to streamline and accelerate business workflows, from policy on-boarding to claims processing and improve the effectiveness of all stakeholders in the ecosystem.
Those carriers, distributors and advisors who are able to plan their tech evolution around these three pillars today will likely dominate their markets in the years to come.
To learn more about the future of technology, the impact of demographic change and the surprises that may come in the next 10 years check out the Ellen’s podcast episode.