The Future Of Insurance

Insurance In The Age of Disruption & Change

How an industry transforms from successful traditional leader to next generation leader

by Denise Garth

Ms. Garth is Senior Vice President of Strategic Marketing with Majesco, a leader in providing insurance platform software solutions and consulting services for the insurance industry across lines of business – Life, Annuity, Health, Pensions, and Group & Voluntary Benefits insurance and Property & Casualty (General Insurance). Reprinted with permission. Visit

“The biggest impediment to a company’s future success is its past success.” – Dan Schulman, CEO of PayPal. This insightful quote is just as true for insurers as it is for any company that has been a successful leader in its market. It is a time of disruption and change – technological revolution, fast-changing customer needs and expectations, and shifts to an on-demand, sharing, Gig and platform economy. Some insurance leaders understand this. They have plans and are aggressively responding. Others, however, are slow or are not responding at all.

Four years ago, at the start of InsurTech and the disruption it has brought, we began tracking how the industry is responding to the trends impacting insurance … identifying the Knowing – Doing Gap. The gap highlights that insurers know and recognize changes in the industry, but they are not planning and doing rapidly enough. Why? They struggle to maintain strategic focus, suffer through limited investment and fight against competing priorities. Instead, insurance leaders must stop talking about the opportunities and start doing, using the disruption and change as a catalyst for “real change.”

So where are we today? Majesco’s Strategic Priorities report provides a strategic lens into the industry that is now revealing distinctly different approaches being taken by insurers. The trends and initiatives we have tracked over the last four years are exposing three distinct paths that have significant implications to growth and future relevance including:

  • Modernize the Existing Business – Replace legacy systems in a private or public cloud to keep and grow today’s business.
  • Optimize the Business Today – Create new digital capabilities to protect and grow today’s customer base.
  • Create a New Business for Tomorrow – Build new business models for a new generation of customers and products.

Finding Balance in the Shift to Digital Insurance 2.0

Placing your organization on these paths isn’t always easy. It is a logistical hurdle. The weight of the organization is shifting its pillars of support while simultaneously attempting to improve in some areas, create new products and services, and dismantle others. If it could be captured in art, it might look like a Cirque du Soleil performance – a performance of incredible acrobatic feats, with an unrivaled level of artistry that transports to a world of wonderment and awe. A world of possibilities!

Many insurers are holding onto decades of operational tradition built into their legacy systems that support their current business and they don’t want to throw it away as they embark upon a journey from being a successful legacy player to a new age digital insurer. Making a “safe” transition and shifting their technological and administrative weight without mishaps is crucial to not disrupt their current business. As they explore the shift to Digital Insurance 2.0, they should consider adopting a five-pillar approach to foster a safe transition.

1. Move from Knowing to Planning to Doing
Insurers can get the maximum benefits from their digitalization initiatives if they take a well-planned approach. Start by studying and understanding the market trends from new customer expectations, new technologies and new market boundaries that will help provide an outside in view as we outlined in our 2018 Future Trends report. Innovative participants and new entrants are rewriting the rules of business, and with it, redesigning organizational and business model structures, and how products and services are defined and delivered. They are using digital technology and data and analytics to better understand, underwrite and service their customers with tailored products and services.

As a result, many industry orthodoxies are increasingly irrelevant, yet most insurers have been reluctant to reinvent themselves, all while new entrants and a small (but growing) number of innovative incumbent insurers are rapidly introducing new products and services into the market, more personalized than ever, to meet the unmet or under-met needs of a rapidly changing market.

If an insurer hasn’t yet wrestled with the necessity for change, now is the time to wake up and understand the factors, and swiftly take action. Opportunities abound for incumbent insurers who move quickly and decisively to Digital Insurance 2.0.

2. Keep the customer in focus
Understand your current and future customers because their needs and expectations are likely different. Insurance customers are changing across multiple fronts, including demographics, use of technologies, digital behaviors and increased expectations. Savvy, innovative companies are redefining insurance from an outside-in perspective to adapt to what customers want and expect, instead of following the generations-long practice of an inside-out perspective that requires customers to adapt to the way insurance works. As a result, these innovative companies are transforming insurance from a mysterious, confusing and difficult ordeal most would rather avoid, to a more transparent, simple and engaging experience. These innovators are using new technology, new data, new processes, and changing market boundaries to swiftly move the industry from Insurance 1.0 to Digital Insurance 2.0.

The biggest impediment to a company’s future success is its past success – Dan Schulman, CEO of PayPal

By understanding how insurance customers make decisions that activate their insurance behaviors, we can understand why Digital Insurance 2.0 entrants are transforming the Insurance 1.0 business model. With this knowledge, existing insurers can create their own unique strategies and capabilities using new technologies, processes and business models to facilitate behaviors that are beneficial to both their customers and their companies.

Customer focus is always win-win.

3. Build a culture that anticipates hurdles
The success of digital change depends on how quickly and smoothly your company can embrace change. In today’s world, responsiveness matters. Responsiveness is the healthy result of quick recognition (that something needs to change) and active speed (the pace at which the organization moves). Leaders are responsible for the organization’s responsiveness. They place their organizations on the paths that lead to success or failure.

It may take some time for your people to leave their comfort zone and adopt something new. Nurture change champions in every department. Educate teams on how digital transformation can directly benefit them. Create digital adoption milestones along with rewards to encourage healthy competition among departments and regions. Help them be pathfinders.

Early movers are pathfinders. They can experiment with new business models, products and services. “Fast followers” hold dwindling options in their hands and they place their businesses at significant risk. For those who respond with speed, their leaders will be rewarded by the creative inspiration and excited optimism of their teams. Initiative inspires initiative.

Speed and leadership are a powerful combination.

4. Choose the right partners
Successful reinvention requires making a large bet—one that can overcome the drag of the old way of doing things. Making that big bet requires leadership, confidence and expertise … both internally and with your partners. Selecting the right insurance solution partner makes all the difference. Partners who are forward thinking, innovative and are leaders in their space but also have an extensive ecosystem of other partners who bring other innovative capabilities integrated to their solutions can help eliminate the “knowing – doing” gap. The right partner can bring insurance expertise, technology excellence and leadership. This powerful combination can help insurers outperform the competition to become the next generation leader.

The right partner will accelerate the path to the future.

5. Adopt a future-focused platform
Leaders view a broader range of technologies as important to their companies as identified in our 2019 Strategic Priorities report. Leaders specifically surpass others in key technologies that are foundational to the platform and API market shift, including open APIs, mobile, IoT, microservices and digital payments. This is significant given that a study by McKinsey noted that insurers who invest in more technology are performing 6% better than peers and growing twice as fast.[i]

In addition, leaders embrace different ecosystems, partnership arrangements, and InsurTech more than others. Specifically, they are more likely to partner with other insurers, MGAs and InsurTechs that offer product, service and market options to strengthen their businesses through the multiplier effect of ecosystems and partners.

A cloud platform with key technologies is mandatory.

The Challenges are Worth the Rewards

Though there are three paths to the future of insurance, there is only destination for next generation of insurance leaders — the digital future. Insurance leaders must place their organizations on the road to modernization, optimization and creating a new business model as quickly as possible. Digital transformation, though fraught with challenges, is far less risky than the alternative. Digital insurers will be rewarded with market opportunities and feel far less constrained by a limited set of product and service offerings.

Are you ready to lead your organization into the digital future? Getting out ahead of the curve is more important than ever.


Be sure to download the Strategic Priorities 2019 report for a glimpse into how other insurers are accelerating along their own paths to the future of insurance and look at Majesco CloudInsurer™ and Majesco Digital1st Insurance™ platforms to see how Majesco is the right partner for the future of insurance.
[i] Tanguy, Catlin, et al, “Making digital strategy a reality in insurance,” McKinsey & Company, September 2016