Digital Transformation in Insurance · 2019-09-06 · is proprietary to Gartner, Inc. and/or its...
Transcript of Digital Transformation in Insurance · 2019-09-06 · is proprietary to Gartner, Inc. and/or its...
© 2019 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. This presentation, including all supporting materials, is proprietary to Gartner, Inc. and/or its affiliates and is for the sole internal use of the intended recipients. Because this presentation may contain information that is confidential, proprietary or otherwise legally protected, it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.
Juergen WeissPractice Vice PresidentGartner Research & Advisory
Digital Transformation in InsuranceAMIS Convención de Aseguradores
May 15, 2019
1 © 2019 Gartner, Inc. and/or its affiliates. All rights reserved.
Digital Giants Dwarf Financial Services…
Source: Forbes 2000 (2018),Gartner calculations
26%22%
Percentage ofFSI Companiesin Forbes Top 20
2006 2018
53%
7%
Percentage ofDigital Giantsin Forbes Top 20
2006 2018
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…And Incumbents Feel (Fear) the Impact
2%5%
7%
25%
15%
5%
13%
18%
10%
OtherCreatesignificant
opportunities forincumbents
Causeexistentialthreats to
incumbents
Causesignificant
difficulties forincumbents
Minor impactson incumbents
No impact onincumbents
Will changehow investor's
view ourindustry
Activities inother industrieswill have a halo
effect on ourindustry
No significantimpact
Impact on Industries Impact on Incumbents
“Digital Giants will be in Our Industry”: 57%
Source: Gartner CEO Survey (2019), N=96
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Key Issues
1. What’s the State of Digital Business in Insurance?
2. Which are the Challenges and Risks for Digital Transformation?
3. How can Business and IT Leaders Support Digital Business?
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Top 10 Priorities for Insurance CIOs Dictate…
Priority Focus Area1 Digital2 Revenue/Business Growth3 Customer Experience4 Business Model Change5 Operational Excellence6 Modernization of Legacy Systems7 Data and Analytics8 Automation9 Corporate Merger & Acquisition Activity10 New Products and Services
Source: Gartner CIO Survey (2019, N=138), Q: What would you say is your organization’s top priority for 2018 and 2019?
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… Investments Across the Insurance Value Chain
77%
57%
54%
50%
46%
45%
42%
35%
34%
32%
4%
4%
7%
5%
8%
6%
11%
18%
6%
6%
Customer service
Product development
Claims management
Sales
Underwriting
Marketing
Policy issuance and administration
Operations
Quotations management
Pricing
Percent of respondents increasing investment
Percentage of respondents decreasing investment
Source: Gartner CIO Survey (2019, N=100), Q: To which degree do you expect your organization's IT spending to change across these insurance value chain areas from 2018 to 2019?
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There Seems to be Digital Progress …
1%
Source: Gartner CIO Surveys (2017-2019), N=151-168), Q: Which of these best describes the stage of your organization's digital initiative - i.e., your organization's digitalization efforts?
Ambition Design Deliver Scale Refine No Initiative
-24% -3%
216%46%
-30%
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But the Insurance Industry Seems to be Stagnant
Making digital an integral part of business strategy and planning
Harvesting results from digitalization
Very Inefficient* Very efficient*
18%
2017 2018 2019
18% 20%
11% 11% 12%
10%
2017 2018 2019
12% 5%
21% 20% 17%
*Bottom/top 2
Source: Gartner CIO Surveys (2017-2019), N=151-170), Q: How effective is your organization in…?
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Insurers Focus on Business Optimization
57%47% 50% 47%
33%
Improveemployee
productivity
Increaseexisting
revenue/value
Create bettercustomer
experience
Deliver entirelynew, digitally-enabled
products/services
Create new business/operating/
service models
83% Optimization 60% Transformation
My organization is focused on digital business in order to ...
Source: Gartner (2017), N = 30/151
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Key Issues
1. What’s the State of Digital Business in Insurance?
2. Which are the Challenges and Risks for Digital Transformation?
3. How can Business and IT Leaders Support Digital Business?
10 © 2019 Gartner, Inc. and/or its affiliates. All rights reserved.
Primary Inhibitors for Digital Transformation
What do you think is your organization's biggest barrier to move from the initial phases of digital
business transformation to scale (top 3)?
Source: Gartner (2017), N=111
Culture
43%23%
13%
Talent Resources
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Digital Dexterity - Ambition and Ability to Apply Technology to Improve Business Outcomes
Ambition to WorkDigitally
Ambition to BuildDigital Businesses
Ability to Work Digitally
Ability to Build Digital Businesses
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Digital Dexterity Matters
The Payoff From Digital DexterityLikelihood of Accelerating Digital Business Transformation
Source: Gartner (2018), N = 3,481 employees from all industries and functions.Assessed in terms of ability to gain value from digital initiatives, speed to launch digital initiatives and speed to complete digital initiatives
1.0x
3.3x
0
1
2
3
4
Moderate Digital Dexterity High Digital Dexterity
Percentage of Respondents Exhibiting High Digital Dexterity inFinancial Services:
11.1%
Source: Gartner (2018), N=342
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Insurers are Stuck With Legacy IT Systems
Source: Swiss Re Sigma/own calculations (2018)
25,37433,118
42,47552,632 60,789
69,12879,221
88,75997,726
107,502116,168
126,163136,475
Mill
ion
USD
Global Development of IT Budget Mix and IT Debt between 2005 and 2017 (in million USD)
RunGrowTransformCumulative IT Debt
Insurers Accumulated Globally More Than 136 billion USD of IT Debt Since 2005…
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25%Reactive — slow
decisions, localized, ad hoc response to
business demands or initiatives seen in
the market.
30%
Active — teams and LoB share best practices and approaches. Locally funded initiatives with strategic focus as a mainstream market response.
23%
Defined — innovation watch involves external resources. Teams funded and
sustainable. Processes and tools/methodologies are formalized and
shared. Active executive support/participation.
15%
Performing — strategic partnerships contribute ideas and resources. Expert innovation and catalyst teams. Best-in-class processes and tools/methodologies. Planned and funded, championed at enterprise level.
Pervasive — world-class leader/pioneer in innovation methods and practices. Expansive, open-innovation and co-development
programs. Multiple high-functioning enterprise and distributed teams. Pervasive culture of innovation. Core competency
integral to all business activities.
7%
Source: Gartner (2016), n = 60
Organization Levels of Innovation Maturity Are Rather Low
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IT Has an Execution Problem
30%46%
Business Maturity IT Maturity
Source: Gartner Digital Maturity Assessment (2019), N=141
100%
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Key Issues
1. What’s the State of Digital Business in Insurance?
2. Which are the Challenges and Risks for Digital Transformation?
3. How can Business and IT Leaders Support Digital Business?
17 © 2019 Gartner, Inc. and/or its affiliates. All rights reserved.
AI and Analytics are Game Changer Technologies
32%
32%
11%
8%
7%
6%
4%
4%
4%
3%
1%
1%
1%
1%
Artificial intelligence-machine learning
Data analytics (including predictive analytics)
Digital Transformation
Cloud (including XaaS)
RPA
Blockchain
Internet of Things
Business Intelligence
Mobile (including 5G)
Automation
CRM
Cyber security
APIs
Autonomous Vehicles
Source: Gartner CIO Survey (2019, N=142), Q: Which technology area do you expect will be a game changer for your organization?
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1. What is being measured?
2. Where are we today?
3. What is our target goal?
4. What is our desired outcome /
benefit?
5. What is our balance point?
Develop the Right Set of Digital KPIs
60%2025Goal
(3)
27%Today (2)
Percentage of insuranceinteractions that are virtualor digital (1)
2-5% bettercustomeroutcomes (4)
Reducedcustomersatisfaction (5)
Digital customerinteractions
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The Predominant Business Ecosystem Style Has Been Linear …
Linear Value Chain
Enterprise
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… But Now There Are New Ecosystem Styles
Linear Value Chain
Enterprise
New!Platform-Led
(aka multisided)
Enterprise
New!Decentralized
Enterprise
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The Digital Business Technology Platform
Customers
Data
Things Employees
Partners
Data & Analytics Platform
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Future Proof: From Digital Optimization …
Customers
Things Employees
PartnersCustomer Experience Platform
MultichannelCustomerPlatform
IoT Platform
Ecosystems Platform
Service-BasedCore Insurance Platform
Information System Platform
Customer Analytics
Data & Analytics Platform
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… to Digital Business
Things
Customers
Employees
Partners
Shareconomy
Data & Analytics Platform
APIManagement
Ridesharing
RoadAssistance
LoyaltyMgmt.
Startups
Third-PartyServices
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From Technology Platform to Platform Business
Digital Platform
Other Ecosystems
E-MarketplaceNo Platform
MatchingCollaboration
Platform Business
Orchestration Creation
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Recommended Gartner Research
2019 CIO Agenda: An Insurance PerspectiveKimberly Harris-Ferrante (G00384051)
Why Insurance CIOs Need a Digital Business Platform RoadmapKimberly Harris-Ferrante, Juergen Weiss (G00368741)
Measure Your Digital Progress Using Key Performance Indicators for Insurance CompaniesJuergen Weiss (G00355499)
Toolkit: Understanding the Individual, Team and Leadership Attributes That Drive Digital SuccessMatthew Cain (G00382707)
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Get Recognized for Being an Innovator!
http://www.gartner.com/technology/eye-on-innovation-awards/financial-services/