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Life Insurance 2020 Research Outlook

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8 January 2020
Nicolas Michellod
Tom Scales

Abstract

TECHNOLOGY PRIORITIES OF LIFE AND HEALTH INSURERS

Life and health insurers continue to adapt their business model to a rapidly changing environment. To do so, we think there are key trends to watch for 2020:

Among the challenges faced by insurance CIOs and technology professionals tackling the legacy challenge remains a priority. The legacy and ecosystem transformation topic involves various strategic choices including the approach to replace existing system and the target system to which to migrate. In addition, the complexities of conversions have some insurers looking at alternative for closed blocks and for new greenfield operations. The blend of a new back-office system blended with the strategic use of third-party administrators (TPA) can soften the complexity.

A growing proportion of insurers are trying to build a dedicated eco-system. To do so they leverage APIs and emerging technology vendor partners. The eco-system question is a challenge for many CIOs because it requires a clear strategy in terms of APIs and also a granular view of the insurtech players and emerging technologies that can add value to their value chain. In this context, they are increasingly considering cloud models not only for point solutions but also for their core insurance systems.

These decisions have to be taken in an economic context that remains particularly tough with low interest rates and uncertainty about the future of financial markets. We should also add the ever more demanding customers’ needs in terms of digital experience. These constraints force insurers’ CIOs to investigate new technologies to improve their efficiency around data and automation.

These issues can be solved by specific technology initiatives and in 2020, we are going to focus our research efforts to help life and health insurers better understand the technologies at play to address these problems, to support their technology player vendor selection and to anticipate major trends across technologies and regions.

VendorMatch, Celent’s new vendor discovery tool, is playing an increasingly important role in our vendor analysis. See more at https://www.celent.com/vendormatch.

2020 RESEARCH THEMES

Key areas will dominate our life and health research agenda for 2020: the cloud, data and Artificial Intelligence, digital and emerging technologies and our flagship vendor reviews as well as our Model Insurer initiatives (to be published in April).

Cloud

The cloud adoption by insurers has increased recently. We have also seen new core insurance systems vendors focusing their model on the cloud model. While it remains uncertain whether life and health insurers are ready to go full cloud, we think cloud-native and/or -ready systems represent a valuable alternative they need to consider.

Data and Artificial Intelligence

Data is ubiquitous in insurance and nowadays life and health insurers can access rich sets of data externally. In addition, the supply of Artificial Intelligence techniques is growing. We have already observed many valuable initiatives leveraging new sources of data and Artificial Intelligence (machine learning, NLP, image recognition, etc.) but we think CIOs need to further investigate the relevant applications of these technologies. The Life insurance industry is leveraging data-based underwriting to transform the entire acquisition process.

Digital and Emerging Technologies

Optimizing core insurance processes via smart automation and offering customers digital interaction touch points has been a focus of life and health insurers CIOs recently. As they are building their ecosystem leveraging APIs and emerging technology providers, life and health insurers continue to put the customer experience at the center of their preoccupations.

Vendor reports

There is no eco-system, platform or system replacement project possible if insurers don’t have a deep view of the insurance core system vendor landscape. Helping CIOs understand the differences between these vendors remain a priority for Celent.

Model Insurers initiatives

We’ve just closed nominations and have received more than 100 nominations coming from all over the world in five categories:

  • Customer experience transformation,
  • Data, analytics and Artificial Intelligence,
  • Digital and emerging technologies,
  • Innovation execution, and
  • Legacy and eco-system transformation.

We’ll be assessing them and developing case studies of the winners in the mid-April publication.

TOPIC AREAS

Industry Trends and Case Studies

  • Model Insurers case studies from around the world
  • Life policy administration system deals
  • API strategies
  • RPA evolution
  • Artificial Intelligence technologies

Survey Based Research

  • CIOs priorities
  • Cloud perception
  • Insurers perceptions of life policy administration systems

ABCD reports (Our flagship vendor assessment)

  • NA Group Life Policy Administration System Vendors
  • Health Policy Administration System Vendors
  • Underwriting and New Business Systems Vendors
  • Customer Communication Management System Vendors
  • IT Services Vendors

Contact us for more information about what we have planned in Q1.

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