Today’s insurance market is driving a need for increased responsiveness to changing conditions - consumer demands, regulatory changes, and competitive threats. To meet this need, insurers are transforming to increase their speed to market for product changes.
This transformation is necessitated by the barriers many current legacy environments present – it is often unclear where to even start due to the lack of a unified product view and a poorly documented current product state. Further, the divide between IT and business groups leads to costly delays. This can result in significantly long cycles when trying to make even the simplest of changes.
The first step in enabling an insurer to overcome these hurdles is to bring the business more directly into the change process and provide clarity for both the business and IT groups. The question as to who should do what isn’t as easy as it sounds, though. I find it useful to keep this in mind: the business group knows the market and understands the product nuances and adjustments required to take advantage of opportunities. IT understands the systems and the need for rigor and integrity. Therefore, when faced with an opportunity for change, the business side is the best suited to describe it, while IT is the best suited to implement it. (For more on this, see my article “Configurable Software Solutions: Blessing or Curse?”)
Simply going faster, however, falls short of the true objective. While speed is important, simply delivering accelerating product changes is not sufficient. Insurers need to deliver the right product to the right market at the right price. That is where segmentation comes in. There is currently an industrialization divide happening in the market – where insurers with generic offerings will compete solely on price, but those who are able to personalize offerings and service based on customer preferences will be able to truly capitalize on the market opportunity and, ultimately, compete on value. With the insight to identify segments in the market with differing needs and exposures, specific product offerings can be delivered rapidly AND effectively. This creates an environment that not only decreases the initial go-to-market time, it also lowers the cost and risk to enter new markets and makes managing these offerings responsive and sustainable.
Driven by the need to make rapid product changes, profitably, insurers are seeking to achieve true speed to market and focus on taking advantage of market opportunities with more precise pricing within granular market segments, while ensuring it is cost efficient both in the short and long term