As digitization across the insurance industry accelerates, it can be tempting for insurers to jump on the proverbial bandwagon and devote resources to every new technology that promises fundamental change for the industry. And while it is true that insurers will need to embrace next-generation technologies to remain competitive in the future, not all technologies are created equal.
Executive SummaryDigitization has been a big topic of conversation in the insurance industry, especially as the pandemic has accelerated a lot of technological initiatives, but how can insurers decide which technologies will be truly transformative for their business and which are mostly hype? Bill Pieroni, president and CEO of ACORD, shares his perspective on how insurers can prioritize digital transformation and choose the right technologies to accompany them on this journey.
Countless studies, including the ACORD Insurance Digital Maturity Study, have found that there is no correlation between IT spend—as a percent of premium—and returns for insurers. Simply put, “throwing money” at technology will not necessarily yield positive results. Insurers must instead discern which technologies and capabilities have the potential to truly transform their business and the broader industry and practice sustainable, thoughtful investment in these tools. But with so much hype around the latest emerging technologies, it can be difficult to know which ones will have material, industrywide impact.