Gartner Top 10 Technology Trends Impacting Life and PC Insurance CIOs in 2014

This research note is restricted to the personal use of carmen.davids@sanlam.co.
za
This research note is restricted to the personal use of carmen.davids@sanlam.co.za
G00260600
Top 10 Technology Trends Impacting Life and
P&C Insurance CIOs in 2014
Published: 14 April 2014
Analyst(s): Juergen Weiss, Kimberly Harris-Ferrante, Steven Leigh, Jeff Haner
Gartner has identified the 10 technology trends that will be most relevant to
life and P&C insurance IT leaders this year. Insurance CIOs should use this
research to assess the maturity and business value of technologies and
better advise their business users.
Key Findings
Insurance CIOs need to advise their business peers on the business value and use of new
technologies to support critical business priorities such as customer experience, operational
efficiency and improved profitability.
Expanding their technology competencies will be mandatory for insurance IT leaders

developing long-term IT strategies that contribute to their companies' value propositions and
generate additional business.
Legacy IT systems and business processes, inadequate IT budgets and lack of critical IT skills
will be among the inhibitors for insurance IT leaders evaluating and selecting disruptive
technology trends.
Recommendations
Insurance CIOs:
Map your 2014 IT portfolio against the technology trends outlined in this research, and analyze
how well your current IT investments can support running, growing and transforming the
business.
Assess the impacts of these trends on your company-specific internal productivity and
customer experience. Evaluate how difficult it would be for your company or your IT
organization to generate real-world return on investment (ROI) from the adoption of these
technologies.
Identify the potential business and technology risks these technology trends present for your
company. Develop measures to mitigate these risks that are aligned with the company's risk
appetite and risk threshold.
Table of Contents
Analysis.................................................................................................................................................. 2
Overview.......................................................................................................................................... 2
Top 10 Technology Trends Impacting Life and P&C Insurance in 2014.............................................3
Legacy Modernization.................................................................................................................3
Cloud Computing....................................................................................................................... 5
Risk Management and Compliance Solutions............................................................................. 7
User Experience Technologies....................................................................................................9
Event-Driven Architectures and Real-Time Operational Intelligence........................................... 10
Mobile Applications and Technologies...................................................................................... 12
Social and Collaboration Technologies..................................................................................... 14
Sales Force Automation and CRM Tools.................................................................................. 16
Internet of Things......................................................................................................................18
Advanced Analytics and Business Intelligence.......................................................................... 20
Analysis
Overview
Gartner has identified the 10 most important technology trends for the life and property and
casualty (P&C) insurance industry for this year to help insurers' IT leaders assess and prioritize
critical technology options (for a related business-oriented discussion, see "Top 10 Business Trends
Impacting Life and P&C Insurers in 2014"). The technology trends described in this document are
presented in no particular order, and the sequence is not intended to imply any prioritization.
Insurance CIOs will find this list useful as they reposition themselves and their IT organizations to
provide more technology guidance to their companies' business leaders. Articulating the business
opportunities of these technology trends will enable insurance CIOs to move beyond purely tactical
and operational IT roles.
We first published this document type in 2013, and we have made changes to the technologies
included in this list since that time:
We excluded metadata architectures and frameworks from this year's top 10 trends, because
this is already a fundamental aspect of many of the other trends discussed here.
Page 2 of 23 Gartner, Inc. | G00260600
We added sales force and customer relationship management (CRM) tools, in a decision that
reflects life and P&C insurers' increasing focus on customer centricity and agent productivity.
Next-generation portals have been redefined as user experience technologies to better express
the strategic direction of many IT projects in the insurance industry, as well as to show the value
of improved usability across all channels, not just portals.
Social media has been replaced by social and collaboration technologies, because we have
noted a stronger focus on facilitating internal and external collaboration.
Telematics and sensor-based technology have been replaced by the Internet of Things,
reflecting the expanding connections of physical objects, as well as emerging use cases in the
insurance industry (for example, "wearables" and smart home technology).
Big data has been replaced by advanced analytics and business intelligence (BI), given that the
current adoption of true big data systems by life and P&C insurers remains somewhat
immature. More real business value is generated by advanced analytics and BI.
Mobile technology has been redefined as mobile applications and technology, taking into
consideration the widely varied technologies from apps to different mobile platforms, such as
media tablets that are being adopted.
Event-driven architectures and real-time operational intelligence, legacy modernization, cloud
computing, and risk management and compliance technologies remained unchanged on our top 10
list, because we continue to see significant client interest in these technology trends.
Top 10 Technology Trends Impacting Life and P&C Insurance in 2014
Legacy Modernization
Analysis by Juergen Weiss and Jeff Haner
Trend Description
Legacy modernization is a broad term used to describe the continuous evolution of IT applications
as part of the software life cycle, including system modernization and replacement. Gartner's IT Key
Metrics Data for 2014 shows that insurance CIOs spend an average of 61% of their annual IT
budgets on running the business (see "IT Key Metrics Data 2014: Key Industry Measures: Insurance
Analysis: Current Year"). In this highly resource-constrained environment, legacy modernization is
necessarily a mission-critical concern. Legacy modernization frees up resources for other high-
priority investments that have the potential to grow and transform the business. Insurers worldwide
clearly understand the importance of modernization. The Gartner 2014 CIO Survey showed that
insurance CIOs considered legacy modernization one of their most important technology priorities
for the coming three years.
1
And a 2013 survey of U.S. life and P&C insurers found that the
respondents considered legacy modernization "very critical."
2
Gartner, Inc. | G00260600 Page 3 of 23
The 2013 U.S. survey showed that the three primary drivers for legacy modernization are the need
to improve:
Services for customers or business partners
The level of operational efficiency
The time to market of new products and services

Gartner research and client interactions indicate that these drivers are universal, and can be
identified as reasons for legacy modernization in other geographies as well. There is also a wide
range of other company-specific drivers for legacy modernization in the insurance industry,
including the need to mitigate system or vendor risks; the desire to reduce costs particularly
maintenance costs; the shrinking pool of workers with the skills to maintain legacy systems; and
pressure to meet regulatory compliance requirements.
Insurance CIOs have different options for modernizing legacy applications, including system
maintenance and replacement. More than 80% of the respondents to Gartner's 2013 U.S. survey,
for example, preferred to mitigate the risks of legacy modernization by gradually replacing individual
application components, or running old and new systems in parallel for a certain period of time. We
are also seeing several code conversion and platform migration scenarios, especially in cases
where legacy applications still meet certain business requirements or the costs of new packaged
implementations are too high. Technologies such as enterprise service buses and business process
management (BPM) solutions are commonly used during such modernization projects. These
solutions can improve connectivity to other enterprise systems and also improve the user
experience by implementing more modern presentation layer functionality.
Gradual replacement requires a significant amount of time. Many insurers, under intense pressure to
meet customer expectations and improve operations, are looking for alternatives that will allow
them to introduce new capabilities more rapidly. A growing number of insurers are focusing on rapid
deployment of full core solution suites with preintegrated modules for policy, billing and claims.
Staged deployments are most common; but smaller insurers, and those that have a narrow range of
lines of business, are likely to deploy a full suite of modules in a single implementation.
Impacts
Legacy modernization initiatives are generally complex, multiyear undertakings that present
significant risks of project delays, budget overruns or failure to achieve the desired scope. For
this reason, an insurer's identified risk threshold and project management experience will
determine its most suitable legacy modernization approach.
Insurance CIOs who fail to conduct realistic project planning or sufficient risk analysis will tend
to underestimate the complexity of legacy modernization projects.
The high level of investment by insurers in packaged core solutions (especially among P&C
insurers) during the past seven to eight years has resulted in the development of an active
packaged core solution market. Several vendors in different geographies now offer mature
solutions that have established successful track records in both life and P&C insurance.
The ability to achieve a timely ROI from legacy modernization will depend not only on solution
or vendor maturity, but also on internal factors, such as cultural inertia and stakeholder
commitment.
Legacy modernization is often a technical prerequisite for the success of other strategic
initiatives, such as digitalization. Without a service-oriented-architecture (SOA)-enabled
architecture, for example, it will be very difficult to expose application logic to mobile
applications.
Recommendations for Insurance CIOs
Create an inventory of your current application portfolio to assess the business value and
technical quality of specific applications and prioritize legacy modernization projects.
Develop an annual application portfolio review and assessment program to actively manage the
business and technology risks of your existing IT environment.
Use risk maps to compare the different legacy modernization options, map the risk impacts of
these options against your enterprise's risk threshold, and communicate the results to senior
management.
Assess the IT organization's current degree of professional project management skills, and
develop plans to improve your employees' capabilities to monitor ongoing and future legacy
modernization projects.
Related Reading
(Some documents may not be available as part of your current Gartner subscription.)
"10 Most Common Mistakes in Insurance Legacy Modernization"
"Beyond Rip and Replace: Mainframe Migration in Insurance"
"High Failure Rates in Insurance Legacy Modernization Challenge CIOs"
"IT Key Metrics Data 2014: Key Industry Measures: Insurance Analysis: Current Year"
"Use Risk Maps to Assess Insurance Legacy Modernization Options"
Cloud Computing
Analysis by Juergen Weiss and Jeff Haner
Trend Description
Life and P&C insurance CIOs are showing increasing interest in cloud computing, which we define
as a style of computing in which scalable and elastic IT-enabled capabilities are delivered as a
service to customers using Internet technologies. According to the Gartner 2014 CIO Survey, cloud
computing ranks among the top 10 priorities for insurance CIOs.
1
And 35% of the participants in a
2013 Gartner insurance webinar stated that they expected better IT scalability from the use of cloud
computing; 24% hoped to see lower IT costs.
3
The third most common expectation was
standardization, with 19% of the participants assuming that wider adoption of cloud computing
would eventually lead to more standardized IT assets and processes.
Despite CIOs' widely held expectations, the hidden costs of cloud computing, such as those
associated with integration with on-premises systems, will limit real-world cost savings (see "Don't
Believe the Hype: SaaS Only Reduces Part of the Effort Needed to Implement and Operate
Business Applications"). Gartner believes the primary benefit insurers will realize from cloud
computing is actually flexibility. The different subcategories of cloud computing, such as software
as a service (SaaS) and its different deployment options (such as private clouds), will significantly
enhance insurance CIOs' sourcing and IT architecture options. Multinational insurers are, for
example, using SaaS to rapidly enter new geographies and to establish "greenfield" operations in
emerging markets. Another use case we have seen is the deconstruction of insurance value chains,
with insurance IT organizations moving certain noncore business processes such as
commissions management, CRM, billing and regulatory compliance reporting to the cloud.
Adoption of cloud computing in the insurance industry is not limited to SaaS, however. According to
the 2014 CIO Survey, 53% of insurance CIOs have also invested in infrastructure as a service (IaaS)
and 40% have invested in platform as a service (PaaS) for better cost variability or to be better able
to quickly test new IT capabilities.
One of the major cloud computing challenges for insurance CIOs is separating the reality of various
cloud offerings from the considerable marketing hype. Vendors are labeling their offerings as
"cloud-ready," because they know cloud readiness is attractive to prospective buyers. However,
many of these offerings especially those from core solution vendors differ little from traditional
managed application hosting, and are not capable of providing all the benefits (such as scalability
and metered pricing) that are suggested by the "cloud" label (see "Survey Finds Few Examples of
Fully Cloud-Enabled P&C Insurance Core Solutions"). Moreover, many vendors have primarily
supported on-premises deployments and lack experience with cloud-based implementations.
Impacts
A wider adoption of cloud computing will force insurance CIOs to address security
considerations, review the maturity of their existing legacy applications, and reconcile complex,
heterogeneous business processes and technology standards.
Different styles of cloud computing ranging from cloud-native to cloud-hosted applications

will vary in suitability for different application scenarios, such as greenfield and application
migration.
IT and business complexity, along with the desire to customize cloud offerings and security
concerns, are key barriers to the adoption of cloud computing. The greater the complexity of an
insurer's existing application portfolio, the less suitable it will be for cloud adoption.
Insurance CIOs will have to combine different cloud deployment options (public, private or
community clouds) as part of their cloud computing strategy.
A growing number of both life and P&C insurance core software providers will invest in the
cloud transformation of their solutions to address market demand, but their cloud experience
and their true architecture capabilities will vary considerably.
Conduct a business and IT maturity analysis to determine when, where and why you should
adopt cloud computing. Identify objectives and potential benefits that extend beyond pure cost
considerations.
Carefully evaluate the cloud readiness of any insurance software providers under consideration,
and request references from industry peers that can be compared with your own operations.
Map cost, security and technology considerations against the risks and benefits of different
cloud computing deployment models to ensure that you select the most appropriate approach
for your architecture.
Invest in a modular, service-oriented solution architecture, as well as in process

standardization, to reduce internal barriers to wider cloud adoption.
Focus in the short term on leveraging true cloud-based solutions for more peripheral activities
as a way to gain experience and comfort with this evolving solution space.
Related Reading
"Don't Believe the Hype: SaaS Only Reduces Part of the Effort Needed to Implement and Operate
Business Applications"
"Forecast: Public Cloud Services, Worldwide, 2011-2017, 4Q13 Update"
"Insurance CIOs Are Limiting Their Options by Insisting on Using Private Clouds"
"Survey Finds Few Examples of Fully Cloud-Enabled P&C Insurance Core Solutions"
Risk Management and Compliance Solutions
Analysis by Juergen Weiss
Trend Description
Risk management and compliance solutions help life and P&C insurers assess, document, control
and report on their various risk types. These solutions typically comprise multiple discrete
technology elements, such as data warehouses, reporting tools and enterprise risk management
applications. Insurers in both developed and emerging markets are increasingly challenged by
regulatory authorities to improve their risk management practices and to comply with a growing
number of national and international regulator frameworks, such as Solvency II.
These increasing regulatory pressures have an immediate impact on IT organizations, but IT is not
always well-positioned to respond. Many insurance CIOs are not currently managing risk
management and compliance technologies, because those technologies are "owned" and operated
by business departments, such as actuarial and asset management. This increases the risk of
suboptimal silo-based sourcing, data management and IT operations, leading ultimately to reduced
effectiveness of enterprisewide risk management efforts and higher IT costs.
Based on conversations with clients, Gartner estimates that insurance CIOs already spend up to
one-third of their annual IT budgets on applications for risk management, security or disaster
recovery. We have also noted growing interest in enterprisewide risk management and compliance
platforms that make departmental solutions obsolete and allow for better synergies across different
regulatory frameworks, such as Insurance Financial Reporting Standard 4 (IFRS4) and Solvency II.
This market demand has led several software providers to enter this market, ranging from suite
vendors (covering a wide set of regulatory requirements, such as control frameworks) to niche
vendors (focused on specific aspects of regulations, such as data quality management).
Impacts
Risk management and compliance solutions implemented by insurers will typically comprise
multiple applications and require considerable integration efforts.
Risk management and compliance solution deployments will likely involve software providers
that insurance CIOs have not been exposed to in the past. CIOs will need to align internally with
their business peers to become acquainted with these providers and assess their delivery
capabilities against internal service-level agreements.
Data quality issues, such as the lack of common metadata structures, data inconsistencies and
poor data governance processes, will present increasing challenges when enterprisewide risk
management platforms are implemented.
Insurance CIOs will need to take ownership of technologies that have previously been managed
outside the IT organization (for example, by actuaries). This will, in turn, require the acquisition
of further integration technologies and new skill sets.
Create an inventory of the risk management and compliance solutions currently deployed
across the enterprise. Identify all stakeholders who are managing these technologies today, and
assess their willingness to hand responsibility for them over to the IT organization.
Evaluate the IT organization's current project management skills, and begin developing
competencies in agile methodologies that will make it possible to address the increasingly
dynamic regulatory environment and the impact of new regulations on existing systems.
Identify the business synergies between different regulations and their technology implications.
Create a technology road map for addressing these regulations and review it with the business
on annual basis.
Related Reading
"Magic Quadrant for Enterprise Governance, Risk and Compliance Platforms"
"There's No Easy Way Through The Solvency II Software Maze"
User Experience Technologies
Analysis by Kimberly Harris-Ferrante and Steven Leigh
Trend Description
Insurers must be easy to do business with to remain competitive in today's customer-centric
market. This means providing positive interactions with both customers and distribution partners
across all touchpoints, especially electronic channels where self-directed interactions occur (for
example, customer or agent portals or mobile sites). As a result, and as part of larger customer
experience management initiatives, insurers are increasingly improving the user experience through
the deployment of new technologies and processes that will provide a customized, tailored and
collaborative interaction. They are doing this in a phased process:
First, the insurer must build a better understanding of the requirements of its users whether
agents, employees or consumers. Gathering data on channel, process and content preferences
is key to fulfilling this vision.
Next, the presentation layer of the user interface should deliver the right content and
experience, based on the individual's or segment's preferences. This means moving from a
"one size fits all" user interface to one that renders different experiences based upon role or
segment.
The process for each transaction should follow the desired flow of that user group or segment.
Mapping out user preferences will be the foundation for this step.
Process analytics will need to be developed to assess process flows and bottlenecks.
Assessing where users stop processes, slow down their filling out of online forms and other
transaction patterns will help insurance CIOs identify ongoing site enhancements that will be
needed to continue to improve the user experience.
In the long term, as the portal becomes one of the most influential touchpoints for distributors and
customers, it will need to be significantly enhanced with new functionality to support cross-channel
interactions and collaboration. Support for interactive capabilities and real-time content rendering
will be a critical success factor in driving user satisfaction. Investment in user experience
technologies, as well as new portals, mobile applications, electronic forms and e-signature
capabilities, will be required to support these tasks. Insurers should also consider how they can
improve the user experience with the use of new data sources, user context, social media content,
mobile device capabilities and improved integration.
Impacts
The growing empowerment of the consumer is placing increasing pressure on insurance IT

leaders to address behavioral preferences across all touchpoints.
The portal is becoming a key touchpoint for insurers, enabling them to deliver intimate,
personalized experiences both sales and e-service to their distributors and customers.
New user experience technologies will allow insurance CIOs to deliver tailored interactions to
individuals or groups, replacing mass content delivery.
Engage with marketing leaders to map new direct marketing needs and identify new user
experience management technologies that can support these requirements.
Work with marketing and line-of-business leaders to review your available sources of customer
intelligence. Determine whether you are capturing information on customer channel preferences
and how that information can be leveraged to support user experiences.
Assess your installed portal technology to identify gaps, limitations and areas where user
experience technologies could help to improve user satisfaction.
Coordinate with your marketing team to assess your customers' cross-channel traffic patterns
and multichannel interaction needs.
Collect and store interaction preferences, including channel and communications preferences,
to deliver a technology experience that fits these patterns.
Related Reading
"Building the Next-Generation Web User Experience in Insurance"
"The Nexus of Forces Will Drive Insurers to Pursue E-Service Innovation"
Event-Driven Architectures and Real-Time Operational Intelligence
Analysis by Kimberly Harris-Ferrante
Trend Description
Business executives with P&C and life insurers increasingly recognize that they need to be both
more agile in detecting changes in their business operations and quicker to respond to those
changes to seize opportunities from slower competitors. For this reason, innovative insurance CIOs
are developing event-driven architectures that leverage interactive digital channels (including
portals, mobile devices and telematics) with new data capabilities (including new data sources,
such as social data, and new tools, including analytics and predictive modeling tools) to support
real-time intelligence and interaction with customers. These efforts can provide the foundation for
multichannel platforms and deliver greater value from customer intelligence initiatives.
This event-driven architectural approach represents an extension of an insurer's existing SOA, but
with an added focus on real-time operational intelligence especially ways of leveraging
information for competitive advantage. This trend is reinforced in large part by the four converging
factors that Gartner has identified as the Nexus of Forces social networking, mobile
communications, cloud computing and information which are making real-time operational
intelligence and event-based operations more realistic than ever before.
The potential uses of real-time operational intelligence include real-time event management based
on the instantaneous detection of events. These events could be data changes derived from an
activity (for example, a customer clicking on a website banner), from new data being collected (for
example, from an e-form or Web application or through a mobile device), or from predictive
modeling tools analyzing data the insurer already possesses. An event triggers an action, whether it
is an automated decision or a message to an individual stating that he or she needs to make a
decision.
This architectural approach can deliver important business benefits by offering real-time insight into
changes in business performance, customer behaviors and business unit performance (including
underwriting, claims, financial and distribution performance). This insight allows processes to be
changed early, before the bottom line is impacted significantly. Real-time operational intelligence is
valuable not only for corporate performance monitoring, but also for customer retention and cross-
selling initiatives, such as the use of website analytics to drive marketing and sales campaigns and
gamification results to feed new product offers.
Impacts
The use of event-driven architectures and applied customer intelligence will help to enhance
customer intimacy; improve customer retention; and increase cross-selling, one-to-one
marketing and overall customer satisfaction.
Real-time operational intelligence can help insurance IT leaders better support customer
experience management strategies by supplying the right information or product offer to the
right customer or prospects, through the right channel, at the right time. This will drive up
closure rates and increase customer satisfaction.
Real-time operational intelligence systems that are programmed to respond automatically to

address predictable business outcomes are less expensive, faster and more consistent than
those that require human intervention. These systems will give insurers a competitive edge.
Develop real-time operational intelligence using a combination of technologies, including

business activity monitoring (BAM) tools, BPM solutions (including rule engines), real-time
dashboards, interactive portals and channels and enterprisewide real-time analytics.
Ensure that the necessary SOA-based architecture is in place, and build a multichannel
architecture that enables channel integration and cross-channel interaction.
Build real-time alert capabilities (using dashboards and other mechanisms, such as email and
text messaging) for key business leaders, including stakeholders in underwriting, product
development, claims, risk and compliance.
Build real-time interactive customer response systems based on needs identified by the
marketing, claims and sales organizations. Create automated, immediate responses to
customer events using event-based technology to provide personalized and real-time
information based on unique customer behavior in a specific channel.
Review customer intelligence initiatives and determine how the application of event-driven
technology can help with channel notifications, event triggers and real-time content rendering
based on customer preferences.
Related Reading
"Best Practices for Designing Event Models for Operational Intelligence"
"How to Improve Your Company's Event Processing"
"Information Innovation Is a Key Competitive Differentiator in Industries"
"The Insurance Call Center: The Center for MCI and Customer Centricity"
"Use Business Analytics on Older Data to Assist in Real-Time Operational Intelligence"
Mobile Applications and Technologies
Analysis by Steven Leigh
Trend Description
The pervasive use of mobile devices continues to transform how insurers interact with customers
and agents. Life and P&C insurance CIOs alike are pursuing mobile strategies to enable sales and
service functions on mobile devices, with tablets increasingly preferred. Life insurers' primary focus
is on optimizing their portals for mobile devices, while P&C insurers are taking greater initiative with
native apps for claims and other service functions.
From a functional perspective, life insurers' primary mobile focus is on new business processes,
sales tools, straight-through processing, and actively optimizing their sales and service portals for
their agents on the mobile Web. This is due in large measure to life insurance agents' attraction to
mobile devices for selling. Agents who are used to selling using pen and paper, rate cards or
notebook computers strongly prefer the tablet experience. Many life insurers resist creating native
apps for both agents and consumers because they are reluctant to make the investment to support
the plethora of devices and operating systems. They also remain unconvinced that consumers who
interact only infrequently with their life insurers will choose a native app experience. However,
mobile websites do not provide agents with the same level of user experience as native apps, and
do not allow transactions to be completed offline.
P&C insurers' first priority, by contrast, has been leveraging mobile devices for claims, but it is
shifting to policy administration service access and pocket wallets for quoting and part of the sales
process. Many P&C insurers have provided mobile apps to their consumers, agents and service
partners, such as adjusters. However, most P&C insurers have not achieved the desired level of
consumer adoption of their native apps, and this has caused many of them to rethink their
approach. They are also looking to smartphones as a way to offer usage-based or pay-as-you-drive
insurance. Both life and P&C insurers will continue to invest in support for mobile devices because
they see value in using a mobile platform for a range of other service events, including bill
payments, policy changes and policy value lookup, and these additional transactions will gain
greater popularity on mobile devices over time.
Impacts
Mobile devices are rapidly becoming the sales and service platform of choice for consumers
and agents. Smartphones are occasionally used for data lookup and simple transactions, but
media tablets are agents' and consumers' preferred devices for product research and more
extensive transactions.
Mobile devices whether using native apps or the mobile Web will increasingly change the
sales process, providing agents with new graphics, touchscreen, recording and other
capabilities that will enable them to better communicate the value of insurance products.
Mobile devices are essential to creating fully digitalized processes for consumers and agents,
and are a prerequisite for the use of emerging technologies. The new data generated by these
digitalized processes will be essential for the next wave of insurance innovation, which will
include gamification and context-aware computing.
Insurers will increasingly add device-specific capabilities, such as geolocation and still and
video photography, to enhance the user experience.
Ensure that your service and sales portals are optimized for the mobile Web by optimizing such
elements as look and feel, touchscreen experience and screen size.
Evaluate usage scenarios, roles and interaction frequency to determine whether a mobile app or
a mobile Web scenario is most appropriate for your company. Mobile apps are generally best
when users are performing process-intensive functions and when offline functions are required.
The mobile Web is generally best for data lookup and simple or infrequent transactions.
Deploy mobile apps for scenarios where users are performing process-intensive functions for
example, life insurance sales and P&C claims or require offline capabilities.
Use mobile devices as a way to deploy digitalization for agent and customer processes, paving
the way for context-aware computing, improved data capture, gamification and social media
integration.
Related Reading
"Best Practices for Global Life Insurers Developing BYOD Policies for Agents"
"Media Tablets Force North American Life Insurers to Rethink Their Illustration Strategies"
"Insurers Need a Framework to Successfully Deliver Mobile Capabilities"
Social and Collaboration Technologies
Analysis by Steven Leigh and Jeff Haner
Trend Description
Social and collaboration technologies enable insurance company employees, agents and customers
to fluidly share information and interact with one another using a broad range of devices and online
venues. Specific technologies include social networks, blogs and microblogs, wikis, collaborative
document creation tools, video and sharing tools, and other technologies that permit users to
contribute and consume content. Common uses for social and collaboration technologies include:
Enabling agents and consumers to interact (using social networks)
Informing employees of trends and decisions that affect them (using microblogs)
Sharing information among employees (using blogs and wikis)
Enabling agents and employees to collaborate online to create documents and other
deliverables
Storing and improving information for, and shared by, agents

These technologies represent both a threat and an opportunity. The threat comes from the power
they give individual consumers to rapidly share information for example, a report of a poor
customer service experience that might negatively impact the insurer. The opportunity comes
from the ability to quickly reach a large number of customers and prospects. These technologies
have the potential to transform the relationship between the policyholder and insurer by providing
opportunities for much closer, more frequent interactions. Gartner research and client interactions
show that insurers are using all of these technologies to increase user engagement. Social and
collaboration technologies are also helping life insurance agents make the transformation from
product salespeople to more holistic advisors by enabling them to provide consumers with valuable
content related to risk reduction, investing and insurance needs.
Social media's dramatic increase in popularity with consumers makes it critical for all insurers not
only those actively promoting themselves through those spaces to listen to, learn from and
respond to their customers and prospects via social media. Insurance CIOs not only need to create
social media policies, but also must deploy enterprise-class social media monitoring tools to
monitor and manage their agents' use of social media and ensure their compliance with company
practices and procedures. Insurers are also building private social networks to enable their agents
to share, collaborate and interact with one another and with home-office employees. In the long
term, insurers should be ready to respond to opportunities and threats related to new services and
business models, such as friend-to-friend insurance.
Impacts
Social media provides new ways for agents and customer service representatives to connect
with external customers and prospects, interacting with them in real time to support new
business, service and claims. Agents will increasingly establish communities on Facebook and
other social networks to communicate insurance-specific and insurance-related content to
increase their value to consumers.
Insurance CIOs and other executive leaders are leveraging social media to help improve
communication and alignment within their organizations, connect employees, gather opinions,
communicate more effectively and enable better project collaboration. Agents will increasingly
share best practices, sales techniques and strategies with one another using social media tools
such as blogs, microblogs and wikis.
Social media monitoring tools help insurance IT leaders to improve problem identification so
that customer service representatives and agents can intervene before negative publicity is
generated. These tools also provide business and IT leaders with new insights into what
consumers value in insurance products, help them identity new sales opportunities, and enable
them to track buying behaviors that drive sales and service decisions.
The increasing frequency and less formal nature of interactions between agents, employees and
customers increase the risk that communications may not be compliant with insurance
legislation and insurance company rules.
Develop social monitoring technologies that enable business leaders to create a governance
framework to ensure that agents' customer interactions are fully compliant with company
practices and applicable regulations.
Catalog current human interactions to determine how social media technology can be deployed
most effectively. For example, managers who need to communicate time-sensitive information
to a broad audience might look to microblogging platforms such as Twitter. A wiki may be
better-suited for service manuals and best practices, which contain more extensive information
that evolves only gradually.
Deploy collaboration technologies to empower employees to create deliverables in collaborative

ways.
Establish social media sentiment analysis capabilities, through either a third-party service
provider or an enterprise-class social media monitoring system. This should be done even if
your organization is not actively promoting itself through social media, because these
capabilities will enable you and other stakeholders to be aware of key trends or urgent
customer service problems that need attention.
Related Reading
"Choosing the Right Social-Media-Monitoring Tool for Your Enterprise"
"Life Insurers Can Increase Online Sales Using Emerging Technologies"
"How North American Insurance CIOs Can Drive Social Media Adoption by Captive Agents"
"Social Media Becomes a Critical Tool in Insurance Distribution Success"
Sales Force Automation and CRM Tools
Analysis by Steven Leigh and Kimberly Harris-Ferrante
Trend Description
Sales force automation and CRM solutions support marketing, sales, customer service and
customer information management. These technologies are used by insurers' home offices, agents
and agencies to manage customer and distribution relationships, interactions, activity, sales goals
and relationship value. This family of technologies has been around for many years, but continues to
evolve as new business cases emerge, and as insurers embrace new processes and channels, look
for new revenue opportunities and strive to improve customer retention.
Sales technologies are core to the insurance industry, and are a main focus of investment by both
life and P&C insurers. These solutions referred to as sales force automation tools have been
an established and mature part of the insurance industry for many years. They allow companies to
manage the end-to-end sales cycles, from agency onboarding to lead management and
commissions payment to sales performance tracking.
Customer service technologies mostly those targeted at supporting call center operations
have also been important investment areas for insurers in the past. Focusing on functions such as
interactive voice response, unified desktop technologies and support for call center representatives
has helped insurers improve their service delivery.
During the past three years, insurers have also significantly increased their focus on marketing,
embracing direct models and seeking ways to interact with customers via Web channels. For this
reason, improved marketing capabilities, both online and offline, is increasingly important. Gartner
expects this trend to continue with the move to digitalization.
Customer information management, by contrast, has had a mixed reception across the industry.
Many insurers still find it difficult to justify the investment needed to build a single view of the
customer, while many others are stepping up their investments in 2014 as a means of supporting
larger customer experience management initiatives. Furthermore, interest in enhancing customer
information is growing. Insurers are augmenting existing data with information about sentiment,
attitude and behavior to provide a more expanded view of the customer. They are also building out
more complex customer analytics to better understand customer lifestyles and life events.
Overall, new approaches to CRM will enable life and P&C insurers to improve campaign execution,
customer segmentation, and direct and one-to-one marketing in both agent and direct-to-
consumer distribution models. Insurance sales remain predominantly agent- and broker-based,
although P&C insurers are rapidly deploying direct-to-consumer sales teams. Irrespective of
channel, life and P&C insurers are increasingly focused on making their sales teams more efficient
and more effective. The rise of mobile devices, social media, data access, gamification, context-
aware computing, digitalization and cloud delivery are all contributing to increasing insurer interest
in CRM solutions.
Impacts
Modern CRM solutions will support an augmented and expanded single view of the customer,
which will include traditional transaction data combined with new attitudinal and behavioral
data, including social and sentiment information. This will provide greater insight into customer
preferences, requirements and needs, and provide improved ability to support customer
segmentation based upon lifestyle or life events.
Mobile communications, social media, cloud computing and data will become essential
components of every business process.
IT investment in agent and broker technologies will rise significantly during the next two years
as insurers focus on strengthening their channel relationships. Gartner believes that investment
in a range of technologies and solutions including mobility, bridges, and exchanges for
agent-carrier transactions, agent portals and lead management will grow during this period.
Improved sales automation capabilities will help agents reposition their value from simply selling
to being more holistic advisors, providing their clients will relevant risk, financial health and
savings goals information, even when the agents are not actively selling.
Many agencies will not have the IT skills to manage new technologies and will need support
services from insurers' IT organizations. Innovative insurers will also offer value-added services
to their distributors, such as analytical services and social media support, to increase loyalty.
Some insurers may find that their old CRM system, already installed, cannot support new
customer-centric initiatives such as direct marketing and Web sales. Replacement of old CRM
systems may be a likely outcome.
Deliver improved sales tools that will empower agents to build communities of customers and
prospects. Those tools will transition agents from salespersons to advisors.
Work with the heads of distribution to redesign and improve existing sales tools in light of
emerging trends, such as mobile, social, data cloud delivery, gamification, context-aware
computing and digitalization.
Build distribution analytics that leverage BI and analytics to assess channel, agency and agent
performance. Get usage data from CRM systems, core business systems (for example, policy,
underwriting and claims) and other sales-oriented systems to holistically measure agents' and
brokers' performance and interaction to improve their effectiveness and efficiency.
Assess shifts in consumer Internet behavior to identify trends impacting marketing, sales and
customer service. Ensure that channels are integrated, online leads are routed to distributors,
and the portal experience provides users with the same quality of interaction they would expect
from an agent, broker or call center.
Related Reading
"Life Insurance Sales Force Automation: Understanding Vendor Solutions"
"Toolkit: CRM Industry Heat Map"
"The Gartner CRM Vendor Guide, 2014"
Internet of Things
Analysis by Steven Leigh and Kimberly Harris-Ferrante
Trend Description
Gartner defines the Internet of Things as a network of physical items with sensors that connect
autonomously to the Internet, to people and to one another. The use of these sensor-enabled
connections is growing rapidly in many industries, and these connections are increasingly being
used by mobile apps (see "Innovation Insight: The 'Internet of Everything' Innovation Will Transform
Business"). The Internet of Things will have very different impacts on the life and P&C insurance
industries during the next several years, because monitoring homes and other buildings, vehicles
and machinery is very different from monitoring humans.
P&C insurers have already begun to leverage the benefits of the Internet of Things. For many years,
fleet insurers have been leveraging telematics technology to manage vehicle risks, using driver
feedback, vehicle recovery and driving diagnostics data. During the past three to four years,
personal lines auto insurers have also started to adopt telematics for usage-based insurance (often
referred to as "pay as you drive"). In both of these use cases, data is collected from the vehicle,
using a factory-installed device or aftermarket unit. The data, which ranges from distance driven to
information on driving patterns (such as speed or acceleration), is then used by the insurer for
pricing or for a range of customer services. A less-developed but emerging Internet of Things use
case is in property insurance, where smart home technology can be leveraged for managing home
risks.
Life insurers can expect Internet of Things-based changes in several different areas, including
improvements to traffic safety and health-monitoring technologies. Some countries (notably
Germany) are beginning to require improved sensing and Web-connected technologies that will
reduce life insurance claims over time. Wearable devices and mobile health monitoring equipment
will deliver lifestyle, behavioral and health data that will help life insurers assess current risks of
death for both group and individual life insurance products. It is not yet clear how this data will
become available to insurers, and the real-world impact on the life insurance industry is still three to
five years in the future. Insurers are not yet even able to adequately evaluate Internet of Things data
to appraise the potential value it can deliver. For example, it is unclear whether measuring fitness
performance, driving Internet-connected cars or monitoring disease care will yield significant
improvements to mortality rates. Insurers will need to gain significant experience with this data to
determine what impacts it will have when assessing risk.
Impacts
Auto insurers will continue to adopt telematics technology that provides them with new
products and new sources of information that IT will need to manage. New business models will
emerge for example, pay-as-you-drive insurance that will incorporate data about a broad
range of driving behavior for use in pricing and underwriting. The data also can be used to drive
more interaction with customers (for example, insurers providing a risk dashboard to customers
can log in to get driving risk scores).
Insurers will look to leverage real-time data from new devices embedded in appliances,
equipment, homes, offices, factories, vehicles and other locations. This data will help with
marketing, pricing, risk selection and claims. In some cases, they will leverage smartphones for
use as sensors.
Life insurers will monitor the effects of the Internet of Things, and innovators will create IT
infrastructure to manage health-related data over time to assess underwriting value.
Device data will provide companies with a wealth of knowledge that can be mined to help
improve core business processes, such as actuarial and claims.
Large data volumes generated from devices will create big data problems, which must be
addressed. Storage volumes will drastically increase, and new tools will be required to support
analysis of these datasets.
Consider opportunities offered by new sources of data on factors such as lifestyle, driving
patterns and building status that are relevant to insurance risk. Use this data to create a road
map for delivering underwriting data to support innovative product offerings.
Evaluate the marketplace for Internet of Things technologies particularly if your company is a
late adopter of these technologies and their potential impact on your ongoing
competitiveness.
Identify partners that can help you with your Internet of Things strategy and with a review of
your current-state infrastructure to support real-time, high-volume device offerings.
Monitor adjacent industries to determine where device data opportunities exist and how your
company can pilot available technologies.
Review data strategies to determine how big data will be supported including storage and
analysis.
Related Reading
"Technology Overview for Personal P&C Auto Insurance Telematics"
"Life Insurers Must Prepare Now for the Internet of Things"
Advanced Analytics and Business Intelligence
Analysis by Kimberly Harris-Ferrante
Trend Description
Insurers are increasingly aware that data is one of the most important assets they possess. To
successfully compete in a rapidly changing and intensely competitive marketplace, they must have
control over, access to and improved insight into data. Data must be turned into information, and
information must be delivered in a timely manner to the business so it can be used to make critical
decisions. Insurers must make information easy to understand, using new visualization techniques
to enable interpretation and further analysis by individuals who do not necessarily have
backgrounds in statistics. Information may need to be delivered via a mobile device. And advanced
analytics models including those that use predictive and prescriptive techniques will help
business leaders make forecasts, identify emerging data trends and determine the appropriate
responses. This must all be done with growing data volumes and an increasing use of unstructured
and external data (including social data).
In this way, the use of business intelligence and advanced analytics will enable insurers to meet
emerging business requirements. While business intelligence has been around for many years,
analytics has taken center stage during the past 24 months. Gartner defines analytic applications as
packaged business BI capabilities for a particular domain or business problem. For insurance, this
includes analytics for underwriting, product performance, claims, fraud and distribution. Analytical
solutions often come with prebuilt industry-specific models, a data model, reports and dashboards
which contain the most relevant key performance indicators that the business user would want to
support decisioning.
Impacts
Insurance CIOs who have successfully implemented BI and advanced analytics capabilities will
support improved decision accuracy and insight into business performance, including actuarial,
underwriting and claims efforts. This will give them a significant competitive advantage over
insurers that have not mastered centralized data or implemented analytics.
Existing BI and analytics capabilities will increasingly need to incorporate social and
unstructured data.
Modelers' and data scientists' skills will be required to support emerging BI and analytical
demands.
Identify untapped areas where business users need information to support decisioning. Identify
sources of information that can be used to augment existing data, and the requirements needed
to integrate data into existing processes for analysis. Use new and unused data to optimize
business processes such as underwriting, fraud and product development, as well as to
improve customer intelligence.
Assess your company's level of analytical readiness, and identify areas where additional
investments in hardware, software and staffing will be needed to support emerging data
initiatives.
Ensure that your systems have adequate scalability for growing volumes and a variety of data
(including unstructured data). Also ensure that enterprise data warehouses, analytical tools and
core systems can support the growing volumes of data and processing power required to
support business requirements.
Review the company's data governance guidelines, including those for the evaluation of data
cleanliness and reporting, to identify limitations of the existing governance program.
Related Reading
"A Framework for Evaluating Big Data Initiatives"
"Insurers Must Fill Technology and Staffing Gaps to Support Intelligent Business Operations"
"P&C and Life Insurers Not Ready for Big Data"
Evidence
1
The Gartner 2014 CIO Survey, conducted in 4Q13, included responses from 114 insurance CIOs,
with 43% representing life insurers and 57% representing P&C insurers. Among the respondents,
46% were based in the Europe, the Middle East and Africa (EMEA) region, 41% in North America
and 11% in the Asia/Pacific (APAC) region.
2
Legacy Modernization Survey: Gartner interviewed IT leaders from 44 U.S. life and P&C insurers
(13 life, 30 P&C and one company that offered both lines of business between July 2013 and
September 2013). The respondents assigned legacy modernization a mean value of 5.9 on a scale
from 1 to 7, indicating that most considered it a "very critical" concern. Seventy-seven percent of
the respondents were currently in the process of completing a legacy modernization project, and
9% had already completed one. The remainder were planning to launch a legacy modernization
initiative during the next 12 months to 24 months.
3
The Gartner Insurance webinar, conducted in January 2014, included 106 participants 70%
from North America and 30% from Europe.
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Gartner Top 10 Technology Trends Impacting Life and PC Insurance CIOs in 2014

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Expanding their technology competencies will be mandatory for insurance IT leaders

Services for customers or business partners

The level of operational efficiency

The time to market of new products and services

Different styles of cloud computing ranging from cloud-native to cloud-hosted applications

Invest in a modular, service-oriented solution architecture, as well as in process

The growing empowerment of the consumer is placing increasing pressure on insurance IT

Real-time operational intelligence systems that are programmed to respond automatically to

Develop real-time operational intelligence using a combination of technologies, including

Enabling agents and consumers to interact (using social networks)

Sharing information among employees (using blogs and wikis)

Storing and improving information for, and shared by, agents

Deploy collaboration technologies to empower employees to create deliverables in collaborative

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