Three Technology Trends Malaysian Insurance CIOS Should Be Aware Of
THE INSURANCE INDUSTRY IN MALAYSIA WILL FACE A NUMBER OF CHALLENGES THAT CAN LEAD TO DRAMATIC CHANGES OVER THE NEXT FEW YEARS. DETARIFFICATION IN MOTOR AND FIRE PRODUCT LINES WILL ALLOW INSURERS TO DESIGN AND PRICE THEIR PRODUCTS DIFFERENTLY.
This is likely going to intensify the competition, lead to market consolidation and increase pressure on premium rates as well as profitability. In addition, Bank Negara continues to promote market transparency with its plans to establish an online product aggregator for the country’s life insurance market to foster insurance penetration and competitiveness. The upcoming ASEAN (Association of Southeast Asian Nations) will intensify competition even further by establishing a wider insurance market in the region. Gartner is convinced that technology plays a crucial role in addressing these challenges. From a strategic perspective, we believe that business and IT leaders in the Malaysian insurance industry will need to focus on at least three primary imperatives in order to maintain existing profitability levels and remain competitive in this market: 1. They will have to raise their level of operational efficiency by improving straightthrough processing, achieving better economies of scale, reducing fraudulent claims, eliminating paper-based business processes and providing better self-service capabilities to customers, agents and brokers. 2. They will need to evolve from a productcentric business strategy and IT architecture towards a customer-centric approach which allows them to raise customer satisfaction, to know and better address customer needs, to reduce churn, to increase the frequency of interactions with their customers and to lift cross- and upselling rates. 3. They will have to become more agile to respond faster to changing market conditions and changing customer requirements, to pilot new technologies and business models, to reengineer existing business processes and to diversify sales and service channels. There are a number of technologies that can contribute to these strategic imperatives and CIOs will need to carefully assess their priorities by applying portfolio management techniques such as Gartner’s Strategic Technology Map. This methodology will allow insurance IT leaders to evaluate and cluster different technologies by their contribution to increase productivity, to raise customer experience and to meet strategic return on investment considerations. Based on Gartner’s experience, there are at least three technology trends that play a major role in addressing the three strategic IT priorities of insurance CIOs: Advanced analytics, the Internet of Things (IoT) and bimodal IT.
Advanced analytics includes predictive and prescriptive analytics as well as big data architectures and more sophisticated information management practices. Insurers need to make information easy to understand, using new visualisation techniques to enable interpretation and further analysis by individuals who do not necessarily have backgrounds in statistics. This demands new tools with advanced visualisation for non-power users. Visualisation should be intuitive and easy to use. For faster deployments, especially by small-tomidsize insurers, off-the-shelf content may be needed. The need for new data is also creating new technology demands — especially for tools that support big data. The use of big data platforms may be required for insurers doing large-scale telematics programmes, those wanting to do comprehensive customer intelligence (for example, bringing in unstructured social or behavioural information) or those conducting new types of analysis that include unstructured data. Gartner believes that insurers will have to acquire new skills — by the IT department and by the business. Data scientists are often cited as an underdeveloped skill in the industry. Furthermore, CIOs should ensure that their IT departments have the right competencies on enterprise data platforms and around data/ information architectures. It may also be necessary to establish a centre of excellence (COE) around certain data or analytical platforms. In the long term, BI and analytics represent a core requirement for insurance success. CIOs need to ensure that the right environment is in place to support emerging business demands and even new business leaders, such as the chief data officer.
...there are at least three technology trends that play a major role in addressing the three strategic IT priorities of insurance CIOs: Advanced analytics, the Internet of Things (IoT) and bimodal IT.
Text Juergen Weiss | Gartner