Chief InsurTech Officer, the CIO 2.0

“Our systems won’t be able to support that unless you invest in core system XYZ upgrade which will take five years and $50 million investment”—quickly leads to the us-against-them environment. Business ends up feeling handcuffed by IT to do anything different when it comes to insurance propositions. This, in turn, leads to an erosion of long-term competitiveness, as new digital-first players are testing the insurance industry’s agility.

What is CIO to do?

CIO needs to lead the critical transition to the IT of the future, starting with the fundamental forward re-orientation and a cultural restart:

1) Not all problems can be resolved by throwing more money at them. A culture of problem solving and curiosity needs to be revived and cultivated within insurance tech teams;

2) Creation of a dedicated “special ops” teams driving digital transformation and building the future technology intellectual property (IP) underpinning future digital insurance;

3) Fix persistent misalignment between business units by increasing proximity between tech and business units, to focus joint efforts on the most impactful problems; Team KPIs need to be realigned to reward experimentation and joint problem solving. Teams need to be allowed to fail;

4) External and open orientation is critical, with close collaboration and cross-learning with tech startup and tech solution provider. The CIO 2.0 has gained a deep understanding of how different teams work together and how to drive tech-enabled synergies between those units with in order to deliver strong strategic outcomes. The understanding of the existing system constraints becomes an invaluable asset rather than a liability.

The over-reliance on expensive consultants and outsourcing firms needs to reduce or stop, and the technology core skill set will need to be brought in-house and cultivated within the technology team. It will undoubtedly take time and significant effort but working with innovative technology startups and businesses will help to accelerate that journey. Re-igniting ownership of the intellectual property will be the key aspect of the long term survival of an insurance company.

Insurance is quickly pivoting towards a new type of digitally-enabled models. Next 10 years will see a complete transformation of insurance industry. Each CIO will have a choice of whether to focus on becoming a core part of the digital business or to stay in the comfort zone and become ring fenced together with the legacy business.

The future of insurance is digital; resistance is futile!