5 IT Transformation Trends for Asia Pacific Insurers
On a recent trip to Bangkok and Hong Kong I had the privilege to facilitate a series of discussion on digital transformation in the financial services industry. It always amazes me when I travel to speak with IT managers to find that regardless off the region, the rapidly growing demand for data analytics and digital transformation sparks a tremendous amount of collaborative conversation and energy.
Many IT transformation trends are not confined to countries, but each region does have different challenges and priorities. When we explore these specific challenges we can begin to have more meaningful discussions and formulate better solutions.
During a recent workshop we looked at some of the trends influencing today’s Asia Pacific Insurance industry including:
- Slowing premium growth – Growing gap in e.g., life protection has a negative impact on revenue from premiums, driving the need for alternate sources of revenue and new business models
- Health care reform – Asia Pacific embraces health care reform, creating more demand for insurance products and enabling insurers to raise premiums
- Competitive landscape – a more positive attitude toward foreign investment is encouraging outside companies to compete for local business
- Demand for Digital – Shifting demographics with wealth being controlled by younger population causing demand for better, more automated services, delivered via digital and mobile platforms
- Changing Regulatory Landscape – Regulations designed to protect consumers and encourage new products are driving the
With this as context, let us look at some of the more insurance-specific conversations that came up in the APJ workshop:
Passion to Transform is High – It came as no surprise that there was strong interest and excitement among the attendees about embracing the challenges and opportunities presented by today’s disrupted world. Most recognized that the impending digital revolution represents opportunity for new revenue and efficiency, and not something to fear.
There was broad agreement about the urgent imperative to transform in light of competitive threats and rising customer expectations. There was also an accompanying excitement about serving as agents for that transformation.
This is Not “your father’s” Insurance Industry
Whereas the Insurance industry is sometimes stereotyped as slow-moving or overly risk averse, the tone we encountered was decidedly different. Regulatory and compliance burdens loom smaller on Hong Kong’s Insurance landscape than on its Banking sector.
One insurance executive told us that he left the banking industry, for a career in Insurance, specifically because of the agility and opportunity it offered. In his words “In Banking I couldn’t get anything done”.
Here are 2 examples of what some innovative insurers are doing:
- One forward-thinking organization is positioning itself to be a disruptor, rather than be disrupted. It is viewing the relative lack of industry regulation as a window of opportunity to establish digital momentum that it hopes will demonstrate to regulators the value of Digital, and set the tone for less onerous regulations.
- Another organization is exploring the use of Smart Contracts to automate and streamline Insurance transactions, so that the insured gets payment on a claim once it can be established that the business conditions of the claim are properly satisfied
Focus on Digital and Mobile
Our customers showed great interest in the Omnichannel methodology we demonstrated in proven implementations, expressing their need to similarly re-architect the customer experiences they offer, to make them seamlessly consumable across channels
- One leading insurer shared that it is completely reworking its internal processes for developing and quickly bringing consumer applications to market via an agile, Dev / Ops-type method.
- Another is embracing digital transformation from a completely different angle, hedging against digital disruption by funding an InsureTech accelerator that invests in health and wearables startups.
- Yet another insurer is working with us on best practices for establishing, and harvesting the benefits of, an “internal startup” incubated within the larger, traditional organization in a “bi-modal IT” setup.
Leveraging Big Data
Our workshop and subsequent discussions revealed our audiences’ keen interest in Big Data, and their recognition that data, as an asset, is a crucial enabler to their key business goal of deepening customer relationships. Insurance, as an industry, has traditionally been leveraging data solutions for marketing; in many ways in a more mature fashion of other industries. Today’s challenge is to leverage that skill in other areas.
APJ insurers are dealing with the same kinds of challenges and constraints as companies in the Americas and EMEA. Insurers are looking to use data analytics in nearly every area of the business, but struggle implementing tangible use cases that deliver the desired results. (For this Dell EMC offers the Big Data Vision workshop)
Insurers are looking for best practices for leveraging Big Data for insight on their customer base while adhering to compliance regulations. But, in addition, they need to explore using data analytics to capture new revenue opportunities. For example, one leading Hong Kong Insurer is enabling its customers to use a fitness tracker and mobile app to earn discounts on their health insurance premiums, collecting key data along the way
Embracing Cloud Transformation
Our discussions confirmed that insurance firms in APJ are taking key steps toward planning and implementing their cloud strategies, and that the challenges they are facing align with those we see in similar Insurance organizations in the US and across the globe. Some of the challenges we heard include:
- Driven by a paucity of mainframe resources, how to modernize a legacy COBOL Policy Administration application toward a forward-thinking cloud-native architecture,
- How to seamlessly transform an aging middleware business process management infrastructure toward a cloud-based architecture
- How to create a strategy for determining which applications ought to be ported to the cloud as is, which ought to be redesigned from scratch, and which should be scrapped
- How to create and operate agile, startup-like, InsureTech-style organizations within the context of a traditional Insurance company
Dell EMC Services Capabilities
When talking with IT managers from the insurance industry we try to quickly differentiate ourselves as a trusted partner (just like most Service providers). But what makes Dell EMC Services different is our ability to strike the proper balance between “blue sky” conceptual and the proven practical. We provide Insurance customers with the best of both worlds, working like a boutique firm, but with the resources and scale of Dell Technologies. This means:
- Helping a leading mortgage insurance firm drive consensus across business and technology stakeholders to identify the most relevant Big Data business use cases
- Developing an infrastructure blueprint for a leading Insurance carrier, driven by technology need informed by its customer engagement strategy, as depicted through its customer business journeys
- Creating an ROI model that made the case for a journey to the cloud on behalf of a leading Insurance company
Drop me a line, if your organization is similar to your colleagues in APJ and you’re looking to have conversations about identifying the best business use cases for Big Data; deepening insurance policyholder customer relationships while navigating privacy concerns; transforming IT into a Service-Oriented Organization; or preparing application portfolios for migration to the cloud.