Evolve or perish: How CIOs can meet challenges due to digital transformation


Property Casualty 360˚ | March 15, 2015

In an increasingly digital world, customers have new expectations about how they interact with their insurance providers. The ubiquity of mobile and apps, in particular, have altered the dynamics of communication and commerce. Customers expect to be able to pay, submit claims and manage their insurance policies online using their preferred devices.

As social media continues to change how customers share and consume information, so too must insurers evolve to incorporate this into their marketing and customer service strategies. The more progressive consumer insurers are already using Facebook, YouTube and Twitter to deliver content on new products and offers.

Simultaneously, forward-thinking insurers are also harnessing the power of big data and sophisticated analytics tools to help them better understand, target and serve their customers. Progressive, for example, has launched Snapshot, a service that gives customers a personalized auto insurance rate based on how they drive. Downloading photos to your insurer’s mobile app and receiving real-time feedback on cost estimates is already a reality. The massive amounts of data gathered by insurers every day is a valuable commodity to third parties in other industries. Thus, ambitious insurers will be looking to aggregate, productize and monetize this information.

Like all businesses in the digital age, insurers need to continually invest in their technology infrastructure to help them stay ahead of the digital curve. This means leveraging the latest innovations that have so radically altered how software and data is deployed and delivered—cloud computing, open networks, software-as-a-service, cognitive technology—to streamline their businesses.

New Priorities for the CIO
The trend toward greater customer focus in an on-demand, omni-channel commercial space has led to dramatic challenges in priorities for the industry’s technology leaders, namely the chief information officers.

In addition, increasingly complex and changing regulations necessitate greater transparency on the part of providers. With the heightened awareness of cyber threats among boards and the associated risks to operations and reputation, CIOs are under pressure to deliver an increasingly sophisticated security response to potentially astronomical operational and reputational costs of a cyber security breach.

Meanwhile, with continued consolidation in the industry, many insurers face the additional challenge of integrating legacy claims systems following acquisitions. 

The Evolving CIO Job Description 
These trends have raised the significance of the CIO role as culture change agents within the insurance sector, and also created a host of new technology roles within insurers—from chief digital officers, analytics, data, and information security officers, to enterprise application developers and operations re-engineering specialists. The following are the competencies and experiences insurance companies should be prioritizing when recruiting and assessing a transformational CIO:

Proactive Leadership: The new breed of insurance CIO is evolving from a predominantly reactive, tactical and IT-focused executive to a much more proactive, strategic and business-focused leader. This transformational CIO needs to be a not only a problem-solver, but a business-aligned innovator. She or he requires an exceptional ability to relate to the customer and the foresight to leverage new technology to bring about change in customer experience.

Technology with Vision: While the most successful future CIOs boast a proven record of success from prior technology leadership roles, their abilities to be general managers of technology is more important, as it provides vision and strategy to implement enterprise-wide technology and culture change.

Consumer Orientation: Insurance companies are increasingly looking for expertise from more consumer-oriented industries, such as retail banking, for technology leaders with the requisite experience, including depth of technical knowledge and proven results in driving business value through IT efficiencies and insights. These forward-thinking CIOs are likely to have experience in digital, data and analytics, with multiple lines of products and complex businesses on a global scale.

Learning Agility & Team Building: Above all, the CIO must be results-driven, with a strong strategic and business acumen combined with the agility to adapt and learn. The CIO will need to have a demonstrated ability to develop and leverage relationships while building high performance teams that have both the strategic business acumen and agile execution orientation to deliver on a series of short-term, value-add projects that contribute to the long term strategy.

Irrespective of reporting structure, attracting the transformation CIO requires the CEO and board to recognize and support the need for business change, talent change, and culture change. Insurance organizations that recruit and retain transformation CIOs will continue to innovate and will distinguish themselves as the next-generation insurance companies for the digital consumer and employee, allowing them to leapfrog their competition and drive more sustainable business growth.

Justin Cerilli leads the Financial Services Technology & Operations practice at Russell Reynolds Associates, a global assessment, recruitment and succession planning firm that caters to the C-suite. He is also part of the Digital Transformation Practice, with expertise in big data and analytics.

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Evolve or perish: How CIOs can meet challenges due to digital transformation