Prior to 2020, the substantial payouts and falling revenues triggered by the coronavirus pandemic would have been impossible to forecast. And in the wake of this financial fallout, one area that has grown exponentially is technology.
Therefore, the general expectation is that insurers in leading markets will continue to increase their spend in technology, battling against rival firms to provide the most innovative, accessible service.
Historically considered purely a “cost center”, technology has truly taken priority as industries are disrupted through the adoption of the latest technology trends, such as the Internet of Things and the endless possibilities of AI - both of which are now attributed to revenue generation.
But even so, most insurance firms simply don’t have tech innovation embedded in their DNA. As you know, insurance is an age-old industry. That leaves a sizable gap between the disruptive tech-led startups (or insurtechs) that have quickly launched highly customer-centric products that eat market share, and the traditional insurance players that are grappling at the rug which is slipping from under their feet.
Still skeptical? The global insurtech market revenue was valued at $5.48 billion in 2019 and $7.11 billion in 2020. It’s expected to reach over $10 billion by 2025, and an astonishing $158,994.52 million by 2030. If that happens, that’s a CAGR of 32.7% from 2021 to 2030.
How can you compete? By investing in an expert Chief Technology Officer.
What can a CTO do for an insurance company?
Overseeing all technological needs, as well as research & development, a strong Chief Technology Officer essentially keeps you in the same league as, or even in partnership with, the disruptive players.
Bringing their invaluable insight to areas such as digital strategy, UX, cyber security, data analytics and SaaS/Cloud services, CTOs can sharpen and maintain your competitive edge.
For example, the adoption of mobile and digital-first technologies and an “IOT approach” to enhance UX remains one of the key technology investment drivers, with 66% of insurance executives recently (July 2021) agreeing that the pace of digital transformation of their organization is increasing.
80% also said that their business and technology strategies are becoming indistinguishable.
A CTO will be able to spot opportunities for harnessing the vast amounts of data now available through multiple new sources. The subsequent emergence of data science teams will improve knowledge of clients through machine learning (ML) and artificial intelligence, and enable predictive analytics and decision management.
We have seen an emergence of new executive leadership roles across insurance organizations to drive innovative data strategies, most notably in Chief Data Officer and Chief Data Scientist positions.
As well as streamlining the service side of things, a CTO will be well-equipped to identify opportunities for data collection and fraud detection, leading to better risk management and mitigation.
Having a CTO on board will also communicate viability and growth both internally and externally. They can identify, suggest and manage revolutionary technological advancements that will transform the way your insurance firm connects with customers, provides tailored services and operates on the whole.
Technology should be a prominent area of concern for any organization looking to stick around for the long-haul. In order to keep up, you must keep evolving.
If you’d like to discuss what a CTO can do for your insurance firm, get in touch with me and let’s schedule time for a call.
