Mark is a Partner at ReSource Pro Consulting.
Digital Transformation Still a Work in Progress
When the pandemic hit in 2020, many property and casualty commercial insurers had to pause, stabilize, and reprioritize their digital transformation plans amid lower business volumes, economic lockdowns, and an uncertain financial environment. But that all changed in 2021 as commercial insurers pressed the pedal to the metal to accelerate their digital transformation journeys.
Now, a recent study from ReSource Pro Consulting, “2022 Strategic Initiatives: P&C Commercial Lines,” indicates that commercial insurers are continuing to advance with their transformation strategies in 2022. However, their focus looks a little different than it did a year ago.
Over the past two years, the insurance industry has shifted its priorities in response to changing consumer demands, altered business patterns, and the ongoing workforce revolution. This year, 100% of commercial lines carriers are at some stage in their digital transformations. But, as insurers move past the plans implemented during COVID-19, many realize that they are not as far along in their transformations as they initially believed, and there is still a significant opportunity to transform their businesses.
Growth and Optimization are Top Drivers of Technology Investments
When looking at differences between insurers focused on small commercial versus mid/large commercial lines, there is significant variance in the business drivers pushing technology investments forward in 2022. In the small commercial segment, growing existing lines, markets, and geographies is the number one factor driving tech investments this year. As insurtechs and new entrants increase market competition, small commercial insurers are more likely to focus on growth than their mid-market/large commercial peers. This increased competition is also why more than half of small commercial insurers are investing in tech as a means of cost containment.
On the other hand, most mid-market/large commercial insurers are aiming for business optimization and transformation with their technology investments to reduce complex manual processes. Currently, there is a wealth of opportunity for them to automate operations and leverage insights for greater efficiency.
Both Tech and Talent Will Be Critical to Insurers’ Success
What is clear in 2022 is that commercial insurers seem to have solid roadmaps for their digital transformation, even if many are still within the early phases. As the year continues to unfold, technology investments will be necessary to build a platform for innovation and growth. Rethinking talent strategies will also be critical now that employees’ expectations have forever changed due to the pandemic.
A major change is underway, driven by key strategic initiatives evolving traditional and transformational aspects of the business, and insurers will need to be bold and embrace change to be successful in 2022 and beyond.
For more information on specific strategic initiatives of commercial lines insurers, including the strategies of the small commercial and mid/large markets, read our recently published research report, “2022 Strategic Initiatives: P&C Commercial Lines.” Visit our Carrier Consulting page to find out how ReSource Pro can help carriers develop strategies to achieve more profitable growth.
