Shaping Our Industry

The Future Of Insurance...

A new decade of change and innovation awaits

 by Denise Garth

Ms. Garth is senior vice-president of marketing for Majesco, industry consultants with over two decades of experience in providing technology solutions, products and services for the insurance industry across lines of business – Property & Casualty (General Insurance), Life, Annuity, Health, Pensions, and Group & Worksite Benefits insurance. Reprinted with permission. Visit here.

January 9, 2020 — Prior to the holidays, we published our newest thought leadership report, Future Trends – Looking Back and Leaping Forward, and hosted a webinar that covered this report as well as early highlights from our upcoming 2020 Strategic Priorities research. The reports highlight that the demands of agility, speed and innovation are dramatically different now, as we enter 2020, than they were as we were entering 2015 or even 2019.

Tremendous changes are on the horizon. As I noted in my blog last week, a jumble of patterns are blurring traditional insurance industry boundaries. If we relax just a bit and allow the blurriness to exist for a few moments, a certain clarity arises, and the picture becomes clear for insurance … where new answers to insurance technology, processes and business models are coming to life.

As we enter 2020, that picture of the future of insurance is gaining clarity. What will this new decade bring? How can we prepare for this future? Here are the “big 8” strategic perspectives culled from our research and engagement with InsurTech and insurance industry leaders that will help create a clear picture of where we’re heading.

The Big 8

As a resident of Nebraska (but still an Iowa Hawkeye fan) and one who likes sports, the Big 8 conjures up memories of the NCAA Conference of which the University of Nebraska was a member, often dominating football. In 1994, the Big 8 evolved into the Big 12 and subsequently changed membership including the loss of Nebraska to the Big 10. The change was more challenging for football than Nebraska anticipated — entering a new era of competitive football that demanded different approaches and strategies.

Why do I bring this up? Because it represents how change can significantly impact well established, competitive and revered organizations … including insurance. Today’s change requires insurers to gain clarity on how to succeed in the future of insurance, which is coming faster than most realize. Insurers must lay the groundwork of a new digital insurance business model that embraces customer, technology and market boundary changes with vision, energy and speed.


Multiple entities continue to reinvent the overall insurance industry and ecosystem – insurers, MGAs, Brokers, Reinsurers, industry orgs, channels, solution vendors, partners, new outside industry players, and more. We will see a shift in power base from insurers to MGAs and reinsurers who are redefining their roles in the ecosystem, particularly for new products and new market opportunities that offer greater growth and less dependence on insurers. At the same time, we will see new players from outside the industry (i.e. Amazon, Microsoft, automotive companies, etc.) continue to redefine their roles within the context of insurance – both challenging and offering opportunities for those who dare to lead and reinvent. This will reshape other elements of the insurance ecosystem from industry organizations, solution providers, channels and partners to define how they contribute to and participate in a new era of insurance.

Insurers accelerate and advance innovation strategies driven at the C-level. People, technology and market boundaries have been disrupted in more ways than we even imagined, challenging the industry to think bigger, think broader and think from an outside-in perspective – the customer perspective – and that is a great thing! It takes leadership and responsiveness to reshape the future of insurance. There is a growing gap – which we call the “Knowing-Doing” gap – separating leaders from followers and laggards that we outlined in our 2019 Strategic Priorities The gap highlights that insurers know and recognize changes in the industry, but they are not planning and doing rapidly enough due to struggles with strategic focus, limited investment and competing priorities. This is why innovation and digital transformation will be driven at the C-level. Leadership connects an insurer’s current and future visions to the markets and opportunities that lie ahead. Leadership grasps how speed to market is influenced by decisive thinking. Leadership identifies the need to address people, technology and market boundaries to drive the organization forward with urgency and determination. Speed and C-level leadership will be a powerful combination.

Unbundling, invention and reinvention of products accelerate a “product arms race.” Insurers will follow InsurTechs in offering new “unbundled” products like microinsurance, event-based on-demand coverage, new services, and new products for new risks and products like cyber, digital identity, space insurance, and more. In particular, we will see accelerated reinvention of auto insurance due to the rapid adoption in emerging tech like autonomous, telematics, rideshare, and embedding of insurance by automotive companies, which will challenge retention of customers and revenue.

Innovative partnerships, ecosystem development and connections gain momentum

Insurance companies will need to compete in a new paradigm beyond their brand, product, price and distribution– the latter being primarily agents. This new paradigm requires using innovative approaches and value creation by transitioning from vertical market boundaries to porous market boundaries – or ecosystems. Leveraging these ecosystems, leading companies will rapidly develop innovative business partnerships that drive growth through the embedding of products in other businesses, revenue sharing, white labeling, and new channel options. A great example would be the AXA XL partnership with Slice Labs and Microsoft for cyber insurance.

We will see a shift in power base from insurers to MGAs and reinsurers who are redefining their roles in the ecosystem, particularly for new products and new market opportunities that offer greater growth and less dependence on insurers...

Digital experience and Digital Experience Platforms (DXPs) are a top driver of transformation. The rapid evolution of digital strategies will continue to challenge traditional out-of-the-box portals (both agent and customer), exposing their inability to deliver personalized engagement, support non-standardized products and easily integrate with innovative partners. Undertaking digital transformation begins with customer-centricity and providing the capabilities that deliver the great experience customers increasingly expect. Painful and expensive business modernization projects over the last decade, coupled with the layers of portals and complex integrations to improve agent and customer experience, do not align with new market dynamics in the digital era of insurance. These “one size fits all” portals do not adapt easily to rapid market changes and increasing customer expectations. Instead, DXPs that offer personalized UIs can do so much more, from basic portal transactions, to interacting with other systems in “real-time,” to providing analytics to identify and create user-specific digital experiences, and much more. In the new era of insurance, it will be crucial to shift from “portals” to digital experiences.

Core Systems rapidly move to Cloud and Next Gen platforms

In a short period of 4 years since the emergence of InsurTech, insurers are redefining their strategies around “next gen” cloud platforms that are technically and architecturally different than on-premise “modern core” solutions. The heart of the insurance platform is an orchestration of next gen technologies including cloud-native computing, microservices, APIs, new data sources, artificial intelligence (AI) and machine learning (ML), coupled with an ecosystem of partners that provide innovative or complementary products and services. With this unified combination of components, insurers can shift from being the “owners of complex core systems” to become the “owners of greater technical agility and flexibility, digital fluency, innovation and speed to value.” Owners of technical agility are far better prepared to respond in today’s pace of change. Visionary leaders see the market and technological trends as a many-fold opportunity for insurance — preparing to use new sources of data, reach new market segments, offer innovative new products needed by customers, and more, with cloud, next-gen platforms. With a “next gen” foundation in place, insurers can focus on optimizing and innovating their business to compete in a new era of insurance.

New data sources, AI and ML rapidly expand in adoption

These are no longer experimental – they are fundamentally changing insurance more than any other technology. In the platform business model, data, AI and ML are crucial to success. Data will be seen as a strategic asset and a critical source of competitive advantage for identifying unserved or underserved markets, tapping into profitable niches, reducing or eliminating risk, driving channel optimization, enhancing service and improving customer experiences. Combining data from traditional internal and new external sources will expand the richness of information used to identify new business opportunities and make operational decisions that are increasing the gaps between insurance leaders and those falling behind. Artificial intelligence and machine learning will rapidly become the tools of choice to streamline and simplify complex insurance processes while using their power to solve traditional insurance problems. Most insurers will look to partners to deliver these capabilities, including core vendors and InsurTechs, because hiring and keeping data scientists is growing exceedingly difficult and may not be the most cost-effective use of data science investments.

Multi-Channel and optimized channels accelerate. Changing customer expectations and behaviors are rapidly pushing insurers into a multi-channel This requires a rethinking of their distribution strategy and execution to ensure growth. In this new era of insurance, nearly every process is rapidly becoming frictionless, including buying. If distribution channels are easy to use with products that are easy to understand, then insurance has the opportunity to grow through a friction-free, multi-channel distribution system. The benefit to the adaptation of these channel dynamics is that we move from needing to constantly go out and “sell” people on purchasing insurance and we introduce insurance that is ready to be “bought” seamlessly at the point of need. This is a sustainable business model, where instead of perpetually fighting for prospects and leads, we are perpetually making insurance easier and more appealing to buy in a multi-channel world. Alignment of the right channels, technologies, and partnerships will ensure that all delivery options meet the expectations of a collaborative, multi-channel experience for today’s and tomorrow’s customers.

Tremendous changes are still on the horizon. As we enter 2020, the future of insurance is intensifying and shifting. Whether you are defining your path or you are well on your way, speed and innovation are the fuel to power your growth strategy for the future of insurance. Forward-thinking leaders are both nurturing and protecting their current business, and disrupting it by building the future business. Majesco’s platforms, including P&C Core Suite, L&A and Group Core Suite, Digital1st Insurance, Insurance and Data Analytics Platform, LifePlus Solutions and Distribution Management can accelerate your organization’s innovations and strategies for the future of insurance.

Future market leadership and success will be defined by focusing on leadership, innovation, and speed.

Are you ready for a new decade and the future of insurance?