Europe’s Insurance CIOs: Are You Positioned to Lead Digital Business Change?
As digital sweeps across the continent, IT leaders in the insurance sector are managing change rather than leading it. Our advice: Get personally involved, elevate from change coordinator to business strategist, and take ownership of technology-driven change.
As technology innovation and business disruption break down the boundaries between business development and IT service provisioning, Europe’s CIOs are stepping up to play a central role in an integrated executive team, our recent study reveals.
In insurance, innovation is transforming business models, just as it is in other major industries. However, insurance industry CIOs see themselves as less central to digital business transformation.
Our study of nearly 300 European CIOs earlier this year sheds light on how digital transformation is being addressed from an IT leadership perspective, as well as the strides these leaders must take to accomplish their digital business objectives. Overall, our research reveals that insurance industry CIOs are struggling to lead the charge, though there are some bright spots:
Compared with the cross-industry average, insurance CIOs are less likely to see themselves as strategists, and less likely to lead digital initiatives (64% against 72%).
Insurance CIOs still see themselves more as the implementer of business strategy vs. their cross-industry counterparts (72% against 66%).
Insurance CIOs are also more intensively involved in talent acquisition (72% against 66%).
And they expect to have P&L responsibility for their area (68% against 63%).
To overcome the challenges and make good on the opportunities, insurance CIOs must transition from coordinators who focus on consolidating and integrating innovative solutions, to digital change agents who provoke change and drive business digitization.
To get there, insurance CIOs must:
Take a hands-on approach to addressing digital opportunities and challenges.
Invest more time in their internal leadership network and manage their relationships more actively.
Ensure the understanding of technology drivers and their impact is distributed across the leadership team.
Establish IT as a talent engine, renewing skills and enticing digitally-savvy, high-potential individuals into the organization.
One key takeaway from our research is that no single technology disruption or fintech focus area will overturn the insurance market. Given the lack of a precise target, CIOs will need to move swiftly to identify the digital initiatives that matter most amidst a broad swathe of opportunities and threats across numerous business activities and elements of the value chain.
Starting points include:
Integrated digital sales for both internal and external channels.
Digital brokers and accumulators, an accepted alternative for many European customers.
Mobile spot insurance for temporary cover.
Telematics in vehicle insurance and industrial cover.
One-touch claims and automated back-office processes — including robotic process automation.
Such initiatives will help cement the typical role of the insurance CIO as a competence center head, with specialists supporting different lines of business across the value chain. At the same time, it has often been left to IT to bring different units together to consolidate change initiatives that address the same opportunities, threats or technologies from different angles. While the CIO may wish to be seen as an innovator, the term orchestrator is often more appropriate.
In this environment, the CIO is well advised to make the necessary changes to his or her own role. Our advice:
Change the investment approach from major programs to a piecemeal strategy, applying small investments to activities with high benefit over the short term.
Evolve the IT strategy from business alignment to a so-called “end-state” focus, envisioning a new enterprise for the future.
Take a lead role in digital initiatives by forming multidisciplinary teams and getting personally involved.
Embracing these recommendations will help insurance CIOs overcome engrained perceptions that they are unqualified to be change agents — and begin to shape the digital revolution.