January 10, 2011 - Next generation technology seems to be a savior, and a challenge, to insurers trying to respond to the changing behavior and expectations of the customers who embrace it.
A research brief released by Strategy Meets Action (SMA), a Boston-based research and consulting firm, notes that the critical role played by technology in the insurance business is not new. What is new, notes SMA, is technology’s momentum, which, thanks to customer expectations, affects pace of adoption, reach, and visibility.
“Next-gen technologies are altering product and service expectations, and changing the way applications are developed as well as how technology-based solutions are implemented and delivered,” says Deborah Smallwood, founder of SMA. “The industry leaders are using them to sense and respond in new ways – creating new measurement bars for customer satisfaction.”
The following are the five technology trends that SMA says insurers should be watching in 2011:
Advanced Analytics Explosion: The basis for competitive differentiation in insurance is fundamentally changing as insurers take business intelligence and predictive analytics to the next level of sophistication. Advances in technology are enabling collaboration, real time action and reaction, event driven triggers, and self-learning that is delivering marketing, underwriting, sales, and operational servicing and risk management insights that would have been beyond our imagination only a few years ago.
Mobile Evolution: The use of mobile continues to explode as the development revolution spurs an abundance of applications for the seemingly never-ending advances in small portable devices with rich function. The integration of voice and data are changing where, when, and how people communicate.
Social Media Momentum: The importance of social media technologies to the insurance industry lies not so much in the technology itself, such as web 2.0 and 3.0, but more in the changes that are resulting in communication behavior – changes that could alter the entire business model for insurance in years to come. Social media avenues are not only changing the style and nature of communication, they are changing norms for what is public versus private, and even the language of personal and business dialog.
Development Revolution: The very nature of the types of applications being developed and how they are being developed is changing. For many years now, the IT industry has been talking about Systems Oriented Architecture (SOA) and the ability to use plug and play components. Indeed, many insurers have made great strides forward in creating the platform and architecture needed to make this vision a reality.
Cloud/SaaS Maturation: The maturation of cloud computing and software-as-a-service (SaaS) is changing the options that are available for the delivery of IT solutions. Some of the confusion in the marketplace about the differences between hosted solutions, SaaS, ASP (application service provider) model offerings, and cloud computing is caused by vendors that mislabel what they are really offering. In spite of any deficiency in clarity, the reality is that there are many new options available to reduce costs, reduce risk, and increase both systems capacity and capability.
Not all insurers need to deploy or use all five of these technologies tomorrow, notes SMA. The choices will make will depend on many factors, including the specific types of business being written, the strategic goals of the organization, current functional capabilities, current IT environment and capabilities, and customer wants and needs.
For additional reading about research predictions on advancing technology, click here.
This story originally appeared on Insurance Networking News.
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