Revealed – insurers’ key tech priorities for 2023
“Improving the customer experience (CX) ranked higher in the survey this year than more strategic focuses, such as growing revenue or new products/services development to support transformation,” said Kimberly Harris-Ferrante, distinguished VP analyst at Gartner. “The economic stressors of the coming year are making companies refocus and shift directions to fill gaps which have existed for many years.
“Insurers need more customer data, including more behavioural and preferential data, to effectively execute digital business strategies aimed at cross-sell/upsell, panoptic personalisation, dynamic customer engagement and revenue growth through new products/service.”
Shifting priorities
The survey found that more than half of CIOs are increasing technology investments this year, with the most common areas of investment being application modernisation, cybersecurity and information security, and BI/analytics.
New demands, such as driving new customer experience or the inability to do straight-through processing, are spurring a stronger focus on application modernisation, especially in core systems, Gartner found. New digital demands are also throwing light on the need to make foundational enhancements, such as stronger security, that insurers haven’t adequately invested in.
“In 2023, creating the right technical foundation for agility and openness will be targeted, along with replacing legacy assets that create a talent and investment drain on the organisation,” Harris-Ferrante said.
Digital technology investment
The survey found that most insurers are looking to reduce costly infrastructure investment, opting instead for cloud technology. Only 31% of insurers said they are not reducing investment in 2023.
The survey found that insurers had mixed feelings about their tech investments. Many insurers who focused on growing innovation said their digital tech investments exceeded value expectations. More than half of insurers who focused on operational excellence said the same. However, the majority of insurance CIOs said they either just met or were behind their value expectations such as improving customer experience and increasing revenue.
“IT investments must support the three industry priorities: response to economic pressures, the talent dilemma and supply chain challenges,” Harris-Ferrante said. “Industry conditions are driving insurance CIOs to shift their investments to match these business needs.”
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