Transforming Insurance in an Era of Disruption Insight 2018

Transcription

1 Transforming Insurance in an Era of Disruption Insight 2018 Asle Kjetil Bratteli VP Executive Programs, Nordics

2 Digital business The creation of new business designs by blurring the digital and physical worlds.

3 Insurance is being digitally remastered or even disrupted? Industry shifts Evolving ecosystems Abundance of new technology New competitors Changes in company focus Business partnerships New value proposition New products Insurance New ecosystems Consumerrelated shifts Demographic movements Changes in consumer behavior Evolving risks and insured items Political and economic conditions Economic conditions Political stability Regulations INSANITY: doing the same thing over and over again and expecting different results. Albert Einstein 2017 Gartner, Inc. All Rights Reserved Gartner, Inc. and/or its affiliates. All rights reserved. To measure and control digital business in the same way as traditional business and expect a different outcome is insane

4 Gartner's Definition of Digital Insurance "Digital insurance" is the leveraging of information and technology to enable new capabilities across the insurance value chain for optimizing, transforming and creating new insurance products, services, business models and business ecosystems Gartner, Inc. and/or its affiliates. All rights reserved.

5 Digitalization: Moving From Digital Transactions to Digital Business Digital Transactions Existing Business Processes Margin Improvement Scale and Reach Process Excellence Optimization Digital Business New Business Models Revenue Generation Value Creation Customer Experience Innovation Use Cases: Mobile FNOL Social login Fraud analytics Mobile wallets App stores Active loss prevention Customer communications management Usage-based insurance OCR/barcodes Gartner, Inc. and/or its affiliates. All rights reserved.

6 Market Brand Ecosystems, Channels, Partners and Customers Applications and Underwriting Support digital channel communication Define brand and reputation customer and intermediary data Develop and monetize business ecosystems Digitalize business processes Develop social media profiles Centralize content and information Analyze need Quote and simulate Evaluate and share risks Monitor brand and reputation Create and maintain brand strategy Analyze channel interactions customer contacts Capture and maintain contextaware computing preferences Interact and engage with customers Provide services and support Track application status Process approvals Underwrite risks Create and maintain reputation strategy Execute marketing communication Develop retention strategies Promote referrals Personalize interactions Track and analyze interactions social media interactions Policies customer campaigns intermediaries and affiliate or ecosystem partners Recruit, train and educate intermediaries Design and manage commission schemes Track and manage intermediary performance Analyze customer experience Issue and bill policies endorsements and renewals cancellations Develop Products and Business Operating Models Claims Operate Business Analyze market Design and configure products Test products pricing and rating information Support FNOL Assign claims Process and investigate claims Govern technology investment Maximize human capital Collect and manage receivables product life cycle Provide actuarial support Crowdsource for ideas Develop alternative innovation mechanisms Coordinate claims networks Settle claims Collect salvage and subrogation Provide legal support mergers and acquisitions Maintain operations management Create R&D centers and partner programs Develop co-opetition partners Support business strategy planning Develop and manage shared services catastrophes Actively prevent losses litigation Execute financial management and reporting assets and investments Optimize facilities and real estate Proactively Risk Detect and Resolve Fraud Regulations and Compliance Develop risk models cyber risks Evaluate credit, market, liquidity and technical risks Define risk business rules Cede risks and manage reinsurance Detect and analyze fraud Research and develop fraud models own risk and solvency assessment Support supervisory reporting social compliance Define risk strategy portfolio risks Communicate and cascade risk mgmt. objectives Assess solvency requirements Control assets and liabilities Prevent fraud security Define and manage control framework Track regulatory compliance Define digital governance strategy reputations operational Gartner, Inc. and/or its risks affiliates. All rights reserved. Evaluate risk of device channels Forecast regulatory changes

7 Market Brand Ecosystems, Channels, Partners and Customers Applications and Underwriting Support digital channel communication Define brand and reputation customer and intermediary data Develop and monetize business ecosystems Digitalize business processes Develop social media profiles Centralize content and information Analyze need Quote and simulate Evaluate and share risks Monitor brand and reputation Create and maintain brand strategy Analyze channel interactions customer contacts Capture and maintain context-aware computing preferences Interact and engage with customers Provide services and support Track application status Process approvals Underwrite risks Create and maintain reputation strategy Execute marketing communication Develop retention strategies Promote referrals Personalize interactions Track and analyze interactions social media interactions Policies customer campaigns intermediaries and affiliate or ecosystem partners Recruit, train and educate intermediaries Design and manage commission schemes Track and manage intermediary performance Analyze customer experience Issue and bill policies endorsements and renewals cancellations Develop Products and Business Operating Models Claims Operate Business Analyze market Design and configure products Test products pricing and rating information Support FNOL Assign claims Process and investigate claims Govern technology investment Maximize human capital Collect and manage receivables product life cycle Provide actuarial support Crowdsource for ideas Develop alternative innovation mechanisms Coordinate claims networks Settle claims Collect salvage and subrogation Provide legal support mergers and acquisitions Maintain operations management Create R&D centers and partner programs Develop co-opetition partners Support business strategy planning Develop and manage shared services catastrophes Actively prevent losses litigation Execute financial management and reporting assets and investments Optimize facilities and real estate Proactively Risk Detect and Resolve Fraud Regulations and Compliance Develop risk models cyber risks Evaluate credit, market, liquidity and technical risks Define risk business rules Cede risks and manage reinsurance Detect and analyze fraud Research and develop fraud models own risk and solvency assessment Support supervisory reporting social compliance Define risk strategy portfolio risks Communicate and cascade risk mgmt. objectives Assess solvency requirements Control assets and liabilities Prevent fraud security Define and manage control framework Track regulatory compliance Define digital governance strategy reputations operational risks Evaluate risk of device channels Forecast regulatory changes Gartner, Inc. and/or its affiliates. All rights reserved. Innovation Differentiation Record (Commodity) Strategic areas

8 Insurance Strategic Business Priorities 2017 Percentage of Respondents Rank Insurance (n = 130) Percentage of Respondents 26% 1 Growth/market share 42% 17% 2 Digital business/digital transformation 22% 10% 3 Customer focus 19% 10% 4 Profit improvement/profitability/asset monetization 19% 9% 5 Cost optimization/management/reduction 8% 7% 6 Innovation, R&D, new products/services 8% 7% 7 Process improvement/optimization/automation 8% 6% 8 Quality/performance/market leader 6% 6% 9 Product/portfolio improvements 6% 6% 10 Partner/channel relationship/expansion 5% s top business objectives for the next two years (2017/2018)? Gartner, Inc. and/or its affiliates. All rights reserved. Source: Gartner CIO study, YE Gartner, Inc.

9 Digital Maturity Levels in the Insurance Industry Level 0 Alien Level 1 Embryonic Level 2 Beginner Level 3 Intermediate Level 4 Progressive Level 5 Leader No formal digital strategy Absence of leadership Digital strategy is work in progress Digital "silos" Focus on some aspects of the value chain Considerable amount of legacy Piloting digital business models and technologies Digital leadership established Mature bimodal IT capabilities Strong digital value proposition Sophisticated multichannel management Agile innovation management No digital KPIs Few KPIs Limited digital revenues Limited nearor real-time capabilities Sophisticated digital KPI framework Enterprisewide "digital-first" strategy Gartner, Inc. and/or its affiliates. All rights reserved.

10 Are Still Rather Low Level 0 Alien Level 1 Embryonic Level 2 Beginner Level 3 Intermediate Level 4 Progressive Level 5 Leader No formal digital strategy Absence of leadership Digital strategy is work in progress Digital "silos" Focus on some aspects of the value chain Considerable amount of legacy Piloting digital business models and technologies Digital leadership established 72% Mature bimodal IT capabilities Strong digital value proposition Sophisticated multichannel management Agile innovation management No digital KPIs Few KPIs 18% Limited digital revenues Limited nearor real-time capabilities Sophisticated digital KPI framework 10% Enterprisewide "digital-first" strategy Source: Gartner, 2017 (N=106) Gartner, Inc. and/or its affiliates. All rights reserved.

11 Gartner's Definition of Digital Insurance Structure of the Digital Maturity Assessment for Life and P&C Insurers Gartner, Inc. and/or its affiliates. All rights reserved.

12 Data is At The Center of Digital Transformation New Products and Services IoT data for usage-based metrics Improved Customer Experience Enhanced data for real-time policy issuance or no-touch claims processing Improved Risk ment And Loss Prevention AI-based fraud detection and fluid free underwriting through modeling Gartner, Inc. and/or its affiliates. All rights reserved.

13 Trend 1: Applying a Product Portfolio ment Approach to Insurance Product Rationalization and Standardization Workflow ment Business Intelligence Analytics and KPIs Ideas Product Pricing, Market and Profitability Testing Strategies and Programs Change ment What-If Scenarios Product ment Project ment Resource Allocation Product Performance Analysis Gartner, Inc. and/or its affiliates. All rights reserved.

14 Trend 2: Adopting New Types of Analytics to Improve the Customer Experience Old: Demographic Modeling New: Life Event, Life Stage and Behavioral Modeling Gartner, Inc. and/or its affiliates. All rights reserved.

15 Trend 3: Building Behavioral Analytics Using IoT Data and Applying It Throughout The Enterprise Basics: Location, Time of Day, Repeat Patterns, Object Performance Over Time, Safety Indicators Customer or Corporate Intelligence Risk Information: Fitness and Health Information, Driving Patterns, User Compliance, Risk Indicators Applied to Product Development, Marketing, Sales, Customer Service, Claims and Fraud Gartner, Inc. and/or its affiliates. All rights reserved.

16 Trend 4: Improving Underwriting Profitability Through New Data and Advanced Analytics More Data Sources: Structured/Unstructured Location/ Geocoding Public Social Customer- Shared IoT Third Party/ Data Brokers Underwriting Decision Engine With Advanced Analytics Automated Underwriting Underwriting Workstation Embedded Analytics Using Big Data and Artificial Intelligence Gartner, Inc. and/or its affiliates. All rights reserved.

17 Trend 5: New Types of Fraud Techniques, Technologies and Analytics Are Required Machine Learning Big Data Predictive and Prescriptive Analytics Analytics: Claims Scoring, Anomaly Detection, Social Media Analytics, Social Network Analysis, Behavioral Modeling, Underwriting Modeling Gartner, Inc. and/or its affiliates. All rights reserved.

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19 Range of Technologies Comprises AI Front Office/Customer Facing Role of AI Technology Back Office/Transactional Chatbots/Digital Personal Assistants Roboadvisors Cognitive Computing Natural Language Processing Machine Learning Autonomous Things Robotic Process Automation (Not Always AI; Depends on Technology) Gartner, Inc. and/or its affiliates. All rights reserved.

20 Understanding the Business Potential for AI Role of AI Technology Front Office/Customer Facing Back Office/Transactional Business benefit: Customer satisfaction and retention Interaction improvement Sales/Service completion Lower cost of servicing/sales Improved customer intelligence Contextualization and personalization of content Business benefit: Efficiency Lower cost of operations Faster and real-time Improved accuracy Anomaly detection Decision support Information discovery Gartner, Inc. and/or its affiliates. All rights reserved.

21 Benefits Are High but Adoption Is Lagging 7% 5% 5% 5% 4% NA P&C and life insurers have a live AI implementation. Another 28% have pilots or tests in the innovation lab. Source: Gartner/ACORD 2017 study Global insurance CIOs that have already invested or deployed AI. Source: Gartner 2018 CIO study Global insurance CIOs report that they have invested or deployed conversational interfaces. Source: Gartner 2017 CIO study Global insurance CIOs report that they have invested or deployed smart robots. Source: Gartner 2018 CIO study N.A. life insurers have invested in roboadvisors. Source: Gartner/LOMA 2017 study Gartner, Inc. and/or its affiliates. All rights reserved.

22 Industrialize the Digital Platform

23 THE SECRET TO DIGITAL IS ANALOG

24 CEO #1 INTERNAL GROWTH CONSTRAINT IS TALENT CIO TOP BARRIERS TO SUCCESS: CULTURE, RESOURCES AND TALENT Source: 2017 CEO Survey and 2018 CIO Agenda

25 Roles That Lead Digital Business Q. In Order of Importance, Please Select Three Roles That Are Currently Responsible for Leading Digital Business Innovation in Your Organization? CIO (Chief Information Officer or IT Director) CTO (Chief Technology Officer or Technology Director) CMO (Chief Marketing Officer or Marketing Director) CFO (Chief Financial Officer or Finance Director) Chief Strategy Officer (Director or Head of Corporate Strategy) COO (Chief Operating Officer) Business Unit Heads or Managing Directors Sales Director or Head of Sales Chief Innovation Officer or Head of Innovation Chief Digital Officer VP of Digital Business Chief Data Officer Chief Risk Officer or Head of Risk ment Chief Counsel (Chief Legal Officer or Director) Other Senior "Digital" Title Other Role Ranked 1st Ranked 2nd Ranked 3rd N = 356

26 Recommendations Insurance CIO Build new capabilities, such as greater business acumen and analytics competencies, and begin to integrate IT and business through tighter team involvement, strategy development, and innovation leadership to drive effective leadership and delivery. Build an IT investment risk framework by comparing digital vision against expected business outcomes associated with growth and digital transformation. Highlight gaps where funding for operational improvements or agility is not supported, Develop new key performance indicators (KPIs) by mapping out IT's contribution to innovation and digital transformation through the identification of new business-outcome-based metrics Gartner, Inc. and/or its affiliates. All rights reserved.

27 Recommendations Insurance AI & Analytics Identify new areas for analytics innovation across the enterprise based upon emerging digital business demands Evaluate analytics maturity in product management, marketing, customer service, underwriting, and fraud Explore how new technologies such as advanced visualization, insurtechs and AI can amplify analytics results Build data mastery, including proper leadership, to maximize analytics investments Gartner, Inc. and/or its affiliates. All rights reserved.

28 Recommended Gartner Research "Defining 'Digital Insurance' Beyond the Buzzword" Juergen Weiss, Kimberly Harris-Ferrante (G ) "Industry Vision: Insurers as Orchestrators of Digital Business Ecosystems" Kimberly Harris-Ferrante, Juergen Weiss (G ) "Insurance 2030 Scenarios: How CIOs Can Survive and Thrive in an Era of Industry Transformation" Juergen Weiss (G ) "Insurance CIOs Need Better Understanding of Business Ecosystems to Drive Digital Transformation" Juergen Weiss, Kimberly Harris-Ferrante (G ) For more information, stop by Gartner Research Zone. For more information, stop by the Experts Desk in the CIO Lounge Gartner, Inc. and/or its affiliates. All rights reserved.

29 Recommended Gartner Research Analytics Innovation Drives Digital Insurance Success Kimberly Harris-Ferrante (G ) 2018 CIO Agenda: Insurance Industry Insights Kimberly Harris-Ferrante (G ) Innovation Insight for Artificial Intelligence in Life and P&C Insurance Kimberly Harris-Ferrante (G ) Augmented Analytics Is the Future of Data and Analytics Rita L. Sallam Cindi Howson Carlie J. Idoine (G ) For more information, stop by the Experts Desk in the CIO Lounge Gartner, Inc. and/or its affiliates. All rights reserved.

30 The Future Is Ours Questions? Gartner, Inc. and/or its affiliates. All rights reserved.