May 6th, 2021

For years, digital transformation has been top of mind for insurance companies. But many carriers were hesitant or slow to commit to tackling a digital transformation project despite all the signs that it was time.

The COVID-19 pandemic has proven to be a catalyst digital transformation. Insurers who kicked the decision down the road are scrambling to get their core systems modernized to meet the demands of today’s remote, digital world. According to Deloitte research, 48% of insurance executives agreed the pandemic showed how unprepared they were to weather this economic storm, with only 25% of respondents agreeing their carrier had a clear vision to maintain operational and financial resilience. ^[1]

As a result of the pandemic, new data from Aon showed that employers offering voluntary benefits increased 27% during the past enrollment period – significant market growth.  In particular, short-term disability participation increased over 15%, reflecting a shifting market opportunity for insurers. ^[2]

Add to this, the proposed federal Paid Family Leave by the Biden Administration on April 28^th.  If the proposed leave becomes reality, it likely will have a monumental impact and present an opportunity for insurers.  The combined growth in disability insurance and the rising need in absence management provides an emerging market opportunity for insurers to meet the changing demands and needs of their customers.  Companies already prepared to administer their customers’ disability insurance and leaves on an integrated basis are well poised to capitalize on the growing market demand.

Unlike the pandemic and the need for digital transformation, the federal leave won’t happen overnight or without warning. While no one could have foreseen the pandemic and the drastic implications it would have on businesses and our very way of life, the rising demand in disability insurance coupled with the new proposed legislation and other state Paid Family Leave laws provide strong indicators of a rapidly changing market that will demand IDAM solutions.

If you don’t have an IDAM solution that supports a disability and absence management offering, the time to act is now!

Increased Demand for Value-added Service Offerings

Majesco’s Strategic Priorities report for 2021 found nearly a quarter of the products provided across all respondents were new, innovative products – reflecting an increasing focus on bringing new products and services to market to meet new risks, behaviors and changing customer demands.

Value-added services comprised a significant portion of these new products at 82% — highlighting how insurers are expanding their product offerings to meet customer needs and demands. While these value-added services were seen as low hanging fruit in the past, this shift reflects the rapid changes we’re seeing across the industry, where the competitive landscape continues to grow as insurers evolve to meet the needs of customers in this new normal.

One area we’re seeing growing rapidly is the voluntary benefits market. In light of the pandemic, employers are taking stock of their workforce, evaluating their current benefit structures to ensure they make the most of their benefit dollars while offering the best value to their employees. Voluntary benefits are increasingly important for employers to offer in the both the fight for and retention of talent.

With more employers rolling out voluntary benefits programs, including short-term disability, the opportunity to provide a value added service like absence management and have it integrated with the disability insurance offering has never been stronger for insurance companies.

Federal Paid Family and Medical Leave’s Potential Impact on the Market

President Biden’s administration recently revealed its American Families Plan ^[3], which includes a proposal for a federal Paid Family and Medical Leave program. While there are still many significant hurdles for this to clear before it becomes law, the impact of such a program on absence management is tremendous.

Details on the proposed program are relatively sparse, but it’s likely that a federal paid leave program would not align exactly with the benefits available in the states that currently offer Paid Family and Medical Leave programs. This would mean the state laws would likely remain in effect, and employees would have to receive benefits under whichever law was more generous in the specific circumstance, adding additional administrative complexity to managing employee leaves of absence.

Currently, calculating the benefit amount an employee is required to receive is different across the various state PFL/PFML programs. With a federal paid program layered on top, with its own calculation method, there would need to be adjustments and offsets from the federal and state payments. Include the varying eligibility rules in the above examples, and the administration will be incredibly cumbersome and require sophisticated technology to manage any real volume of claims.

The complexity of this cannot be understated and the need for a robust solution has never been greater!

State Paid Family and Medical Leave Programs to Be Rolled Out in the Meantime

If a federal program does, in fact, pass, it wouldn’t be rolled out overnight. Biden proposed that the federal program be phased in over a 10-year period, and by year 10, it would guarantee 12 weeks of paid parental, family illness, personal illness or safety-related leave. Beginning in the first year, workers would also receive three days of bereavement leave annually.^[4]

According to DMEC, the outsourcing of federal FMLA has increased at an average annual rate of 5% since 2014, with larger employers also opting to outsource paid leaves.^[5] Even without a federal paid leave program, the customer demand for outsourced absence management is likely to grow with the additional state Paid Family and Medical Leave programs set to be rolled out in the next three years: Connecticut in 2022, Oregon in 2023 and Colorado in 2024.

The inevitable increases in the complexity of the leave landscape over the next few years will drive more employers to look to insurance companies and TPAs to manage the administration of employee leaves for them – creating an opportunity to deepen the relationship and provide additional value.

The market demand and growth in voluntary benefits will only grow, as Millennials and Gen Z strengthen their dominance in the market. The pandemic brought to light the real need and value of insurance from life to disability. The regulatory landscape continues to change.  Together, these market changes create a “perfect storm” of opportunity for growth, particularly for integrated disability and absence management offering.

But capturing this opportunity will require next-generation cloud insurance solution that can meet these demands with agility, innovation and speed.

Are you looking to roll out an IDAM offering to your customers? We are working with many leading insurers today who are capturing this opportunity! Reach out to us today to see how we can help you!

This blog originally appeared on Majesco.

April 29th, 2021

Nothing satisfies an insurance customer more than having a positive personal-interaction experience with any company — even their insurer. All it takes is to meet their expectations of a personalized, smooth experience for a claim, a purchase, or a routine contact such as billing and payments.  It is about creating the “Amazon experience” for insurance.

Of course, when these interactions are disparate, frustrating, complex, redundant, the opposite is true.  Customers become disillusioned and unsatisfied with the insurer.

It would be encouraging to report that all insurers are making great strides in their efforts to enhance customer-experience capabilities through new digital tools, data and processes. But, while some insurers are getting better at digitizing customer-engagement capabilities the candid reality is that, for the most part, most are lagging.

The challenges are well known: Customers do not want to go to different portals or apps for servicing, billing or claims.  They don’t want to be stuck at a web landing page, staring at a screen and wondering what key they need to press to get to the next step. Or, if they do navigate to the right page, they are miffed when they must input personal information multiple times when they need to switch from screen to another. They want a holistic, personalized experience.   In Majesco’s 2020 customer research, we found that insurers needed to reimagine the scope of what they offer to customers, moving from a transaction to an experience that included the risk product, value added services and a compelling, holistic customer experience.

Majesco, in conjunction with the KPMG LLP Insurance practice, is offering a new solution to achieve a Customer 360-Degree experience built on Majesco Digital1^st® Insurance platform that allows customers to easily, holistically connect with their insurer.

Behind the customer view, this innovative solution is as impressive as it is powerful. The solution is a customer-experience engagement platform that provides a 360-degree capability for commercial property and casualty (P&C) customers to seamlessly connect with an insurers’ front-, middle-, and back-office systems as well as with value added services without the customer actually realizing it. They don’t have to, nor should they need to, care about the details that go on behind the scenes…they just need to get their information or task done quickly and painlessly.

Majesco leveraged the KPMG Connected Enterprise function, a modular and agile delivery method, created to help insurers define and align customer experience ambitions, set strategy, customize solutions for targeted organizations, and move rapidly for the benefit of customers and insurers.

If nothing else has become clear in the past year, we all have learned that customers of all ages have – perhaps by necessity – become better informed about how digital technology is fundamental to today’s commercial landscape. All of us, it seems, want to be better connected with businesses, and we’ve become better-educated about how to use technology that we might have avoided using just a short time ago. We’re ordering much more online, scanning and sending documents with a tap on a smartphone, using chat bots to communicate our needs, and we’re increasingly impatient with businesses that do not have digital capabilities.

The new 360 Degree Customer Experience solution is designed to offer customer experiences that place great emphasis on choice, speed, convenience, transparency and clarity. Those demands are the reason why insurance chief executive officers across the globe continue to accelerate operational digitization efforts.

The newly released 2021 KPMG Global CEO Survey shows that 45 percent of the respondents said their insurance company has “sharply accelerated’’ their digitization-upgrade efforts since the onset of the COVID pandemic, putting their organization “years in advance of where we expected to be.’’ Another 55 percent said digitization progress “has accelerated by a matter of months.’’

These drivers are expected to intensify. Forrester reports that digital customer-service interactions will increase by another 40 percent in 2021.[i] Further, Gartner reports that business customers are developing a strong preference for business-to-business self-service, with 44 percent of Millennials preferring no human interaction.[ii]

The Majesco Digital1^st®, 360-Degree Customer Experience initiative, coupled with the KPMG Connected Enterprise program, offers a next generation user-friendly experience solution including:

• A cloud-native, multi-tenant, low code / no code digital platform that hosts a plug and play ecosystem, supported by a breadth of content.
• An EcoExchange insurance marketplace that serves as a partner ecosystem hub. It uses third-party services with a standard semantic layer that allows for easy integration and a true “plug and play” environment for traditional and InsurTech partners. The Eco-Exchange provides a wide range of partner apps (such as Lexis Nexis Risk Solutions, Verisk, Twilio, Splice, and Chase, among others) that can perform myriad functions.
• A capability for fast data ingestion with pre-population of forms that leverage outstanding claims reserve capabilities, machine learning, deep learning, and natural language processing.

This next-generation digital experience for customers represents a critical response to the need that insurers increasingly find themselves in right now: An existential requirement to stand out in a crowded, and increasingly more-agile, highly competitive industry. We believe that success requires an array of solutions built around the customer.

In our view, customers will be drawn to insurers that excel at post-purchase tasks, complex-service tasks, easily managing payments, and managing claims. Insurers that struggle in these areas because of legacy information technology (IT) reasons may be facing serious challenges in a very short time.

For those reasons, we believe that a 360-degree view of the customer provides a way to recognize and manage customer needs in a single place. The idea behind the 360-degree view is to allow insurers to deliver exceptional and consistent experiences across the value chain.

Instead of offering disparate apps, portals, and interfaces for sales, billing, payments, claims, and policy service, the Majesco Digital1^st® solution offers access to all these capabilities (and more through partners) from a single customer engagement platform. The platform is meant to enable connectivity with the array of backend systems to service multiple needs, which is the foundation of a holistic, optimal customer-facing experience.

Using the Customer-360 capability, customers engage a dashboard that links them to services they need at any time, and it provides them with a holistic, end-to-end view for the management of their policies. The digital platform approach simplifies the interactions for the user and can be visualized as follows:[iii]

Use Case With a Customer 360 View

Knowing customers’ desires, insurers would be well served by thinking like a customer, and then executing a thorough examination of current ways they interact with customers throughout the policy lifecycle. Where do pinch-points and gaps appear? Insurers must perform a clear-eyed inspection of their IT capabilities, paying particular attention to how the IT components do or do not support customer interactions. Insurance-company leaders must decide now if they will invest in digital platform technologies that enable the Customer 360 view. If not, they must understand if that decision will put the business on a path where growth through better customer experience will be improbable.

As we enter this new decade, the future of insurance is rapidly unfolding with robust digital business models.  As the industry emerges from the COVID era, Majesco and KPMG are committed to assist insurers keep their customers satisfied through next-generation user-experience technologies. With the belief that the retention of customers is dependent on customers’ perceptions of insurers, the time has come for insurers to invest in capabilities and tools that create enhanced customer experiences and help enable growth in this competitive environment.

Co-authors:

Mike Adler, Principal, KPMG

Denise Garth, Chief Strategy Officer, Majesco

[i] Predictions 2021: It’s All About Empathy, Digital, And Virtualizing Customer Care, Ian Jacobs, Forrester, Oct. 2020.

[ii] Future of Sales 2025: Deliver the Digital Options B2B Buyers Demand, Rama Ramaswami, Gartner Group, Dec. 2020.

[iii] Customer Experience in Action: An Approach to Customer Service in the Digital Age, Karen Furtado and Mark Breading, Strategy Meets Action, April 2021

About Denise

Denise Garth is Chief Strategy Officer responsible for leading marketing, industry relations and innovation in support of Majesco’s client centric strategy, working closely with Majesco customers, partners and the industry.

This blog originally appeared on Majesco.

April 22nd, 2021

Steve Jobs gets a lot of credit for re-imagining computing, for making us mobile, and for putting technology in our hands that has changed the way we communicate, do business, purchase products, and so much more. While in this instance it was the availability of increasingly powerful data storage options and more widespread internet connectivity that made Jobs’ leaps and bounds possible, adversity is more often the catalyst for dramatic change.

Prior to the ongoing COVID-19 pandemic, the insurance industry was working hard to overcome the perception of being antiquated and out of touch. Notably, part of this work involves simply being quicker and more willing to evaluate, purchase, and implement new technologies. Today, the challenges presented by a global health and economic crisis have insurance organizations scrambling to fully support a monumental shift in customer risk needs, demands, and expectations.

But remember, out of adversity comes innovation and invention. For insurers willing to adopt a new mindset and leverage the latest technologies as a way of adapting to market changes, the personal, commercial, economic, and social recovery that is underway is an opportunity. Insurers can come out of the pandemic stronger and more able to meet new customer expectations and global demands, and ultimately, to accelerate growth. Unfortunately, change is rarely easy.

There are operational and technology changes necessary at a foundational level which will enable insurers to match the pace of future business and succeed in this new era of insurance. And, as the insurance industry continues to evolve, it is important to empower leaders with the courage to embrace the opportunity that comes with disruption in terms of product innovation, distribution redefinition, and new technology foundation.

Product innovation

The last decade has seen shifts in lifestyles, workplace trends, entrepreneurship, and new businesses driven by technology, such as online grocery, drone-based businesses, and new services business underpinned by IoT. At the same time, we have seen new economies emerge, such as the gig and sharing economies.

Today, there are more small businesses than ever before, more women starting businesses, and more people working from home. Expectations are also different. Policyholders demand more transparency into premium calculation or risk assessment, self-service options for bill payment, policy documents, and claim status, and an ability to proactively affect premiums through behavior modifications. These changes mean individuals and businesses alike are carrying new risk or carrying existing risk in different ways, and subsequently, product innovation, true product innovation, can no longer wait. The move toward more personalized, on-demand, usage-based insurance (UBI) products is on across all lines of business, but especially in property and casualty (P&C), as a way of accommodating and supporting the evolving business landscape.

Distribution redefinition

While many commercial policyholders will still purchase coverage from an insurance agent or broker, the next generation of policyholders expects channel options. In addition to the agent/broker option, insurers today must offer viable online or direct functionality via a dedicated portal, partnerships with managing general agencies (MGAs) that can cover new geographies quickly, and point-of-purchase, embedded, or ecosystem plays through integration opportunities. It’s no longer just about convenience, it’s about awareness and matching the right coverage to the right policyholder, through the right channel, at the right time. Finding the mix of distribution channels which allows for speed-to-market, producer profitability, and a greater degree of self-service is key for insurance executives redefining the distribution diagram.

New technology foundation

Investments in cloud and next-generation core systems, as well as emerging technologies (such as artificial intelligence (AI) including machine learning (ML), robotic process automation (RPA), and natural language processing (NLP) solutions) will support new greenfield business models and insurance products and accelerate innovation and growth in weeks versus months or years. New commercial coverages, such as those for cyber, cannabis, and on-demand or UBI commercial auto today are born digital and are inherently flexible thanks to the nimble technology platforms on which they are built. As confidence in emerging technologies grows, enthusiasm for immediate adoption must be tempered by industry expertise that does not compromise regulatory compliance, privacy, or security of personally-identifiable information (PII).

Throughout history, there has been a strong relationship between disruption and opportunity – driven by innovation in business and technology. COVID-19, among other cultural, demographic and global pressures, is changing customer behaviors and business models and creating demand for product innovation, distribution redefinition, and new technology foundation. It follows that these demands create opportunities to make insurance better and more relevant through the innovative application of technology. But just as Steve Jobs reimagined the world of personal computing, insurance leaders and organizations must be willing to think differently in order to make the most of this open window.

To hear more about the opportunities, view the recent on-demand roundtable with industry leaders on the opportunities.

Co-authors:

Seth Rachlin, Global Insurance Industry Leader, Capgemini Financial Services

Denise Garth, Chief Strategy Officer, Majesco

To continue this conversation, connect with Seth on LinkedIn and Denise on LinkedIn or Twitter

About Denise

Denise Garth is Chief Strategy Officer responsible for leading marketing, industry relations and innovation in support of Majesco’s client centric strategy, working closely with Majesco customers, partners and the industry.

This blog originally appeared on Majesco.

April 15th, 2021

Spring.  The season for rebirth.  Revival.  Rejuvenation.

We see the first colors – yellow daffodils, green grass, purple hyacinths and white flowering trees emerging.  Spring is the start of something new.  Out of long winter days, snow and bone-chilling cold emerges the new ideas and energy.

And Spring 2021 is unique and more powerful, as not only are we emerging from the winter but also from the COVID pandemic, where hope and the start of something new is budding.

2020 saw the constant threat of disruption, expanded and accelerated due to COVID and its continuous ramifications to the economy, businesses and individuals.  Now, nearly a year after the emergence of COVID, companies – both insurers and their customers – realize it will never go back to “normal.”  As insurers step into the post-coronavirus future, they need to find a balance between what worked before and what needs to happen to succeed in the next normal. And that will take leadership.

The necessity of insurance digital transformation has obliterated any lingering doubts as a result of the pandemic.  With rare exception, operating digitally is the only way to do and stay in business.  It’s transform digitally, or die.

Leaders know they can’t assume the customers they serve today will need or want the same products and services tomorrow…or that the same customers will even be there tomorrow. Leaders are constantly monitoring the changing demographics and dynamics and making short- and long-term adjustments to adapt and thrive in an ever-evolving market.

Andreessen Horowitz, a renowned leader in technology, noted in their blog, “2020 has shown us that every company — no matter their industry or size or age has to become a technology company to survive.”[i]  While many leaders are not technical experts, they understand the business value and impact of technology on the business, not just today but in the future. They recognize they must re-envision their future with new products and business models that will accelerate growth and position them as leaders in the digital age of insurance.

New Market Opportunities with New Products

The COVID crisis seemed to come out of nowhere, blindsiding the world with the force of a tsunami. Suddenly, the “usual” way of doing things no longer worked. We have seen this before with other major events or crisis.  We learned … adaptability to a new market reality is the path to new opportunities.

Brokers and employers faced a new reality this past employee benefits open enrollment season – and they adapted.  The pandemic highlighted the need for specific voluntary benefits based on the market and customer dynamics.  In a recent BenefitsPRO article, they note that new data from Aon shows that employers increased offering voluntary benefits by 27% during the past enrollment period.  In particular, demand for ID protection (likely due to more employees working remotely), short and long term disability, and life insurance led the increases by upwards of 10-40%.  Furthermore, supplemental benefits including accident, hospital indemnity and critical illness saw significant growth as new benefits offered by employers.[ii]

Likewise, we saw a surge in buying individual life insurance, particularly term or whole life.  The value and importance of it rose to the forefront particularly for the younger generation. In our customer life insurance research, we found 79% of Millennials and Gen Z were ready and willing to buy life insurance.  But their expectations on the product and experience were vastly different.  Companies like Haven Life, Ladder Life, Lemonade and others offering a digital, easy and fluidless buying experience saw tremendous growth.  Fast forward and many traditional life insurers are now looking to launch new term and whole life products and business models that adapt to a new reality.

The pandemic had a huge impact on auto driving in 2020, resulting in a growing market opportunity for insurers to accelerate offering UBI auto insurance.  It has been noted that telematics data and the significant drop in driving due to the stay at home requirements early in the pandemic were a key reason insurers could return money quickly to customers, which subsequently has driven increased interest in UBI insurance by customers … and insurers who do not currently offer it.  According to a study from Allied Market Research, the usage-based insurance market is projected to jump another 25% by 2027.[iii]  Those with UBI offerings (and several entrants are coming to market now, such as Farmers’ new commercial auto usage-based program called FairMile) are positioned to capture this market opportunity as auto owners shift from traditional to UBI insurance.[iv]

Due to significantly changed customer behaviors, needs and expectations as well as the use of technology during the pandemic, we are now seeing the emergence of new or reshaped businesses.  Some of the industries poised for growth include e-commerce retailers, online groceries, e-learning, dark kitchens, reshoring of supply chains, virtual meetings, augmented reality and much more.  Many of these will require new products and services to cover their businesses and the new risks associated with them.  At the same time, nearly all businesses have increased their digital presence, increasing their cyber risk and demand for cyber coverage.

New Market Opportunities with a New Business Model

In today’s dynamically changing market, there are a growing number of unserved and underserved markets, often driven by new industries, innovative new businesses, technology, and shifting customer demographics. Instead of fighting for the same market share, capture and grow new market share. A startup mindset will give teams less fear about entering untried or untapped markets.

New and untapped markets are increasingly supported by greenfields and start-ups.  Similar to the post-financial meltdown and the emergence of InsurTech, we are continuing to see new business models – but increasingly from existing insurers as a greenfield. At the same time, we are seeing the “doubling down” on investment in greenfield start-ups or acquisition by existing insurers.

Porch’s acquisitions is accelerating their new business model of providing homeowners insurance with a range of value added services – creating a new customer experience that also helps reduce risk.[v]  Next’s acquisition of Juniper Labs will expand their predictive analytics and data science team to leverage the expertise across their portfolio of insurance products — providing enhanced underwriting to claims through data.[vi]  And then Lemonade is expanding into life insurance with a new offering that leverages the platform from Bestow, a digital life insurance company.[vii]  These companies understand that the risk product is only one piece – that the digital experience and value added services are equally important for a new generation of products and business models.

In these examples, the digital business models are continuing to expand and adapt to new market opportunities across a spectrum of products for individuals and businesses. These greenfields and start-ups have new business paradigms that are continuously tested, growing, adapting and maturing — but at speed unseen by most traditional insurers.  They are applying a healthy mix of entrepreneurial energy and digital expertise to traditional insurance wisdom.

Market Leaders – New Generation with Accelerated Growth

The shifting market and competitive landscape, low growth, narrow margins, high operating costs, declining customer satisfaction and slow speed to market for new products place many insurers further behind those leaders introducing new products and business models that are capturing new market opportunities and growth.  This new generation of leaders are outpacing them on so many fronts, placing traditional insurers in an increasingly challenging position.

Early data from the AM Best Innovation Assessment in March 2020 noted that there is a correlation between innovation and operations.  Those insurers with the best operating performance have better innovation scores and those with the highest overall financial strength ratings have higher levels of innovation.

In our new Strategic Priorities research, we found that those who are focused on new products and business models along with expanding channels, moving to cloud platforms and reallocating resources to focus on changing how they do business are well positioned as a new generation of market leaders.  In contrast, Laggards are significantly behind with a gap between them and leaders of 103% and for Followers that gap is 28%.  This gap reflects a focus on the past, rather than the future – a dangerous blind spot for insurers who want to remain viable and relevant in fast-changing marketplace.  It will take leadership and revival of the insurance business model to succeed.

Spring is here.  A new normal has arrived.  There is no turning back to “normal”.  Bold moves that embrace the “new normal” will define the next generation of leaders in the insurance industry.

As the industry continues a new digital awakening and adapts to market changes, new customer expectations, and global demands, those insurers willing to adopt a different mindset and leverage the latest technology to accelerate growth will accelerate their growth and position themselves in a new era of market leaders.

Are you ready for a new era of insurance?  Are you looking at the opportunities for new products and services that meet a changed marketplace?  Are you prepared to launch a new greenfield business model to provide a new foundation for your future?

Are you ready to emerge a leader in this new era of insurance?

What we can tell you is that your competition – current and new – is actively emerging from the past year with ideas, energy and commitment to the future of insurance.  The buds of new era of insurance are blooming all around us. Open your eyes and see the opportunities!

[i] A16z editorial, “The Enterprise in 2020 — what 24 company builders had to say,” December 18, 2020, https://a16z.com/2020/12/18/the-enterprise-in-2020/

[ii] Payne, Emily, “Charts: Voluntary benefits on the rise,” BenefitsPro, March 29, 2021, https://www.benefitspro.com/2021/03/29/charts-voluntary-benefits-on-the-rise/

[iii] Yale, Aly, “Drivers opting for usage-based insurance amid COVID-19 pandemic, study finds,” February 3, 2021, https://www.foxbusiness.com/money/drivers-opting-for-usage-based-insurance-covid-pandemic

[iv] Golia, Nathan, “Farmers launches commercial UBI in Washington,’ April 8, 2021, Digital Insurance, https://www.dig-in.com/news/farmers-launches-commercial-ubi-in-wash

[v] PYMNTS, “Porch Expands Into InsurTech, Adds Services With Key Acquisitions,” January 15, 2021, https://www.pymnts.com/news/partnerships-acquisitions/2021/porch-expands-into-insurtech-adds-services-with-key-acquisitions/

[vi] Wilhelm, Alex, “As Next Insurance makes its first acquisition, insurtech looks energetic,” December 10, 2020, Tech Crunch, https://techcrunch.com/2020/12/10/as-next-insurance-makes-its-first-acquisition-insurtech-looks-energetic/

[vii] Sheehan, Matt, “Lemonade launches life insurance using Bestow platform,” February 10, 2021, Reinsurance News, https://www.reinsurancene.ws/lemonade-launches-life-insurance-using-bestow-platform/

About Denise

Denise Garth is Senior Vice President Strategic Marketing responsible for leading marketing, industry relations, and innovation in support of Majesco’s client centric strategy, working closely with Majesco customers, partners, and the industry.

This blog originally appeared on Majesco.

April 8th, 2021

The script has played out time and time again. A company rolls out a coveted new offering, meeting a need in the marketplace. But over time, to retain and grow customers while also expanding market reach, the product must adapt to new or shifting customer and market demands with value added services that make the experience more relevant and indispensable.

Take Tesla, for example. The car company has been at the forefront of innovation, creating a line of electric, autonomous vehicles that are sleek and fast — proving that vehicle owners don’t need to compromise on speed or style to forgo a gasoline car. But they are not stopping there.  In 2019, Tesla rolled out its own insurance product for Tesla owners. Elon Musk saw an opportunity to provide more cost-effective insurance for his customers, adding to Tesla’s offerings while bringing additional value to Tesla customers. [i]

Tesla continues to enhance their premier product, by adding additional value from including insurance in the purchase price to other value-added services such as maintenance and repairs that create a whole new experience for their customers.

Not every company is Tesla, but every company should continuously examine the market and their portfolio to add new value-added services.  As our customer research has consistently shown, value-added services are increasingly one of the top areas by customers reflected in the 60-75% interested.

One area of growing interest is integrated absence management for disability insurance. We discussed this growing trend in a webinar with The Standard, a leading insurer who has provided integrated disability and absence management to their customers for a long time. You can watch a replay of the webinar here.

Delivering a Superior Employee Experience

As industries and companies embark on their digital transformation journeys, the customer experience becomes front and center. Apps and interfaces are now designed through a customer-first approach, not a product-first approach. The implications of this shift for disability insurance is the ability to provide a superior employee experience when it comes to filing disability claims or requesting leaves of absence, making it easy given all the regulatory nuances.

Customer self-service is a must-have. Majesco’s latest thought-leadership report, Strategic Priorities 2021: Despite Challenges, Leaders Widen the Gap, found that leaders, followers and laggards have prioritized digital customer self-service.  But not all tools used are created equal – or provide that customer-first capability. As noted in the report, digital insurance platforms transform the older siloed and transaction approach to one that provides a compelling, holistic experience whether for customers, channel partners or employees.

For disability insurance voluntary benefits, employers are looking to their insurance companies or third-party administrators (TPAs) who manage their disability programs to provide a digital experience like this for their employees. An intuitive platform where they can easily submit a leave request, view their time remaining and upload or download any necessary documentation to have their leave or claim approved. Insurance companies and TPAs with a digital solution that provides integrated disability and absence management are well-positioned to address this significant market need, while providing customers with a single point of contact for their benefits, avoiding duplication and simplifying the employee experience.

Simplifying the Increasing Complexity of the Leave Landscape

It’s hard to talk about the leave of absence landscape without using the word complexity. But it’s for good reason. It’s increasingly difficult to stay on top of federal and state paid and unpaid leave laws. And there’s no sign of that slowing down with new regulations in the works.

As if managing leaves of absence wasn’t challenging enough, the transition to remote working is adding an additional layer of complexity with employees scattered across the country working from home, expanding the number of state regulations that must be managed.

As Lincoln Dirks, a Senior Compliance Analyst for Absence Management at The Standard, put it during the webinar, “You take the already complex aspect of dealing with federal, state and municipal leaves in a given state and then you multiply that by 50. The issue becomes that no two of these states run their programs in even close to a similar manner. Rules, regulations, processes, procedures all vary by state.”

This complex landscape, though, has created a significant market demand for absence management – making it the big trend for 2021!  Employer customers need it because spreadsheets and sticky notes aren’t getting it done. And increasingly, insurance companies are expanding their offerings to include it as an integrated value-added service, differentiating them in the market.

The Value-Added Service Opportunity for Insurers

Across the industry, we’re seeing customer demand for new products and services. The acceleration of change and market demand for voluntary benefits, including disability insurance, has propelled insurance companies to fast-track new products, digital experiences and value-added services to create a compelling new offering.  Insurers must reevaluate their current technology platform that will make their products, value added services and processes more cost-effective, while also digitally making them attractive to the next generation of buyers

These trends offer a significant opportunity for insurers to expand their offerings with an integrated disability insurance and absence management solution that their customers are seeking.

In the 2021 Strategic Priorities research, Majesco found leaders are distinguishing themselves by prioritizing modernization and optimization of the existing business, alongside focusing on creating the business for the future, executing a two-speed strategy.

Insurance companies like The Standard are capitalizing on the integrated disability and absence management market opportunity, taking a leader position in creating the business for the future.   Are you taking advantage of this market opportunity to position you as a leader?  Or will you fall behind?

“Having a robust digital absence management system helps employers deliver an automated compliance experience, which is critical as leave of absence regulations are evolving at the federal, state and municipal level,” said Ella Luce, Absence Management Consultant at The Standard. “And absence management is especially challenging to stay compliant when employers have employees that work across the country.”

Are you meeting new customer demands and market opportunities?  Your decisions today in taking advantage of this opportunity will define your leadership position for the future.

Watch the entire webinar and hear from The Standard on how they’ve elevated corporate programs with their integrated disability and management offering on the Majesco website.

About Denise

Denise Garth is Senior Vice President Strategic Marketing responsible for leading marketing, industry relations, and innovation in support of Majesco’s client centric strategy, working closely with Majesco customers, partners, and the industry.

This blog originally appeared on Majesco.

Thoma Bravo, a leading private equity firm on the software and technology-enabled services sectors, purchased Majesco with plans to leverage its own operational experience to enhance Majesco’s capabilities and the continued growth and shift of Majesco’s business model to cloud software revenue.

“In just six short months, we’ve leveraged Thoma Bravo’s extensive resources and industry knowledge to accelerate our growth strategy, shift to cloud product revenue and expand our leadership position in the cloud insurance software sector,” says Adam Elster, CEO of Majesco. “Each day that we work with industry leaders, customers and partners we receive confirmation that our strategy, direction and view of the future of insurance is aligned with the market.  The flexibility of being a private company has allowed us to help the market accelerate their plans and shift to the future.”

Majesco has accomplished the following in the 6 months since the acquisition:

• Strengthened our leadership team with the addition of Joe Aho as CFO.
• Released V11 Release 2 of Majesco P&C Core Suite, Majesco L&A Core Suite, Majesco Distribution Management and Majesco Digital1^st®
• Launched the new Majesco L&A Insurance Data & Analytics Platform.
• Chosen by eight new insurance customers across all Majesco software products and currently have seven existing customers, signed agreements to upgrade and move them to Majesco CloudInsurer®.
• Completed eighteen customer implementations including three upgrades to Majesco CloudInsurer® from older versions.
• Acquired ClaimVantage, a global provider of enterprise claims software as well as absence and accommodation management for the L&A and group market segment. The investment strengthened Majesco’s L&A and Group strategy and expanded the customer base by thirty-five, including many blue chip group and benefits insurers.
• Expanded our strategic partner portfolio to include KPMG, PwC and Microsoft.
• Hosted a strategic partner summit with over 200 attendees from twelve different companies including Capgemini, Deloitte, IBM, KPMG, Microsoft, and PwC
• Increased investment in the strategic partner program including a series of joint initiatives to accelerate insurer’s digital transformation.
• Expanded our ecosystem with three partners and five new apps that provide innovative data and capabilities.
• Recognized by industry analysts including:
• Leader in Gartner 2020 Magic Quadrant for P&C Core Platforms, North America
• Visionary in Gartner 2020 Magic Quadrant for Life Insurance Policy Administration Systems, North America
• “Best-In-Class” Vendor in the Aite Matrix: 2020 U.S. P&C Core Systems Evaluation Report
• XCelent Award for Depth of Service in the North American Policy Administration Systems 2020 Personal, Commercial and Specialty ABCD Vendor View Report
• Leader in Forrester Insurance Agency Portals, Q3 2020 Analyst Evaluation

“It has been an amazing six months with the Majesco team, and the level of execution focused on their strategy,” commented AJ Rohde, Senior Partner with Thoma Bravo.  “We are more excited than ever about the growth trajectory of the company – from their innovative work in cloud insurance software platforms to their increased market leader strength in both the property/casualty and L&A and group market segments.  The focus on M&A with the acquisition of ClaimVantage three months in and with many in evaluation, will contribute to their accelerated growth.  We are thrilled with the leadership, execution and results which have exceeded our expectations.

About Majesco

Majesco provides technology, expertise, and leadership that helps insurers modernize, innovate and connect to build the future of their business – and the future of insurance – at speed and scale. Our platforms connect people and businesses to insurance in ways that are innovative, hyper-relevant, compelling and personal.  Over 200 insurance companies worldwide in P&C, L&A and Group Benefits are transforming their businesses by modernizing, optimizing or creating new business models with Majesco. Our market-leading solutions include CloudInsurer® P&C Core Suite (Policy, Billing, Claims); CloudInsurer® LifePlus Solutions (AdminPlus, AdvicePlus, IllustratePlus, DistributionPlus); CloudInsurer® L&A and Group Core Suite (Policy, Billing, Claims); Digital1st® Insurance with Digital1st® eConnect, Digital1st® EcoExchange and Digital1st® Platform – a cloud-native, microservices and open API platform; Distribution Management, Data and Analytics and an Enterprise Data Warehouse. For more details on Majesco, please visit www.majesco.com.  

Contacts
Laura Tillotson
Director, Marketing Communications and Creative Services
+ 201 230 0752

Laura.Tillotson@majesco.com

April 1st, 2021

It was 1999 and everything about business was changing. The Internet was hot and growing! Ebay and Amazon launched within the previous 4 years.  Napster debuted the peer to peer music file sharing network – the precursor to iTunes.  It was all about e-business!

Fast Company magazine was putting out 300-page monthly issues that covered the most innovative companies and people imaginable. Every time you turned a corner, you found a new Starbucks that you hadn’t seen before. Apple had just created berry-colored, egg-shaped computers called iMacs. The economy was hot. IT departments were busy with Y2K preparations. The future was coming fast and furious!  Could life get any better?

With all of the optimism for the future in the air, the time was ripe for people to “discover their working selves.” Two Gallop researchers, Marcus Buckingham and Curt Coffman wrote a managerial book, First, Break All the Rules, that had us thinking about how to do things differently using our individual strengths. They used interviews with over 80,000 employees to identify practical insights regarding managers. Some of the insights for individuals and managers are highly relevant when carried to insurers and systems. For example, in their chapter on How to Manage Around a Weakness, they discuss how managers can devise a support system that keeps an individual’s strengths operational while rendering their weaknesses irrelevant.[i] The exact same principles can be applied to insurers who find themselves with weaknesses that seem to be rendering their strengths ineffective. There are support systems that can make those weaknesses irrelevant.

In a 2001 follow-up book, Now, Discover Your Strengths, Buckingham and former Gallup chair, Donald O. Clifton, built on that idea by helping individuals identify their strengths so that they could focus on what they do well. This concept also works well in the macro sense for insurers. How well an insurer knows its strengths and weaknesses will determine its ability to proactively and aggressively make the right strategic and operational moves.

If we think about what has transpired the last twelve months during the COVID-19 crisis, we see a pattern emerge that is crucial for insurers to re-visit.

• There is great new and existing opportunity in the COVID and Post-COVID economy.
• Insurers need to know their organizations well enough to know whether or not they are prepared to take advantage of the opportunities. They need to know which strengths and talents that they are missing and which ones they have firmly in hand.
• They need to focus on their strengths while they seek assistance from others to shore up weaknesses.
• They need metrics. They need to pursue continuous evaluation of where they are against competitors because that landscape is constantly shifting. They need to know: “Are we Leaders, Followers or Laggards?” They need to use that position, no matter what it is, as inspiration to move forward.

For the past five years, Majesco has been helping insurers look in the mirror and to gauge their efforts in light of the marketplace shifts and trends and other insurance organizations. In what ways are these companies leading? Are they doing enough to be considered Leaders? Are they Followers, still in the race, and trying to close the gap? Are they, perhaps, Laggards…desperately needing to look in the mirror and reconsider their activities in light of their strengths and weaknesses?

This year’s comparison and analysis has been tinged with the presence of COVID-19. How are companies reacting? Has it modified their plans? Majesco’s latest thought-leadership report, Strategic Priorities 2021: Despite Challenges, Leaders Widen the Gap, sheds light on how COVID-19 has negatively and positively impacted insurers and their plans for the future. We’ll share some key insights from Majesco’s report below.

Finding Opportunity and a Way Forward in a Crisis

We have seen the significant impact of the COVID crisis on the growth and strategic activities last year for all three segments; even the Leaders were not immune. But what distinguishes Leaders from the others is how much better they were prepared and responded to the crisis. Our research suggests the pandemic could be an inflection point that redefines every company in the industry – by pushing  Laggards into further irrelevance, testing Followers to recommit to a new digital future, and providing Leaders a springboard to accelerate innovation, competitive differentiation and growth.

Leaders are able to take advantage of the unique conditions of the crisis that can create the springboard which sparks innovation. A recent article in MIT Sloan Management Review helps explain these unique conditions, highlighting there are “five interdependent conditions that characterize a crisis and boost innovation.”[ii]

1. A crisis provides a sudden and real sense of urgency.
2. Organizations can drop all other priorities and focus on a single challenge, reallocating resources as needed.
3. Teams come together to solve the problem with a greater diversity of perspectives.
4. The importance of finding a solution legitimizes what would otherwise constitute waste, allowing for more experimentation and learning.
5. Because the crisis is only temporary, the organization can commit to a highly intense effort over a short period of time.

Leaders are undoubtedly viewing these conditions as an opportunity to seize a competitive advantage, which is reflected in their stronger optimism for the future compared to Followers and Laggards.

When assessing the outlook over the next three years, the impact of COVID is clear, as seen in Figure 1.  Both Laggards and Followers have the same level of decreased optimism for the future as they had in the assessment of their companies’ growth and strategic activities in 2020 vs. 2019.  However, Laggards also had nearly a 25% decline in their outlook for both last year and the next 3 years whereas Followers, while less, still showed smaller declines of 10% in both.

Leaders, on the other hand, show much more optimism. Despite a 5% decline in their future expectations compared to last year’s survey, this is less than half of the 12% decline in their assessment of their companies’ performance in 2020 vs 2019.

Figure 1: COVID-19’s impact on outlooks for company growth and strategic activities over the next 3 years

The most compelling result was a staggering, game-changing 103% gap between Leaders and Laggards in how they envision their companies over the next three years, a significant increase from the alarming 64% gap on their assessment of the past year (Figure 2).

While less, Followers’ 28% gap does not bode well for their future and contradicts earlier evidence suggesting they are keeping pace with the Leaders.  While initial appearances may have been encouraging, digging deeper highlights that the breadth and impact of what Followers are doing is not enough for the future. The gap is slowly growing and with another crisis it could substantially impact their future.  Given we have seen multiple major events or crises nearly every 4-5 years over the last two decades that have accelerated change – dot.com, 9/11, 2008 financial crisis, emergence of InsurTech and COVID – the likelihood is great!

Figure 2: Gaps between Leaders, Followers and Laggards in assessments of company growth and strategic activities over the next 3 years

Even more discouraging for these two segments is the continued growth in the gaps with Leaders in their optimism for the future. This is especially alarming for the Laggards, whose gap swelled by nearly 40 percentage points.

While not encouraging, Followers and Laggards must remember that every challenge has an opportunity or solution, some of which are incredible and give hope for an exciting, new future.  They just need to proactively plan and execute on these to create an optimistic future.

Mirror, Mirror on the Wall

Instead of asking the famous quote by the evil queen in Snow White – “Mirror, mirror, on the wall — who’s the fairest of them all?” … Insurers should ask themselves “Mirror, mirror on the wall – am I a Leader, Follower or Laggard?”

This is where Majesco’s high-level analysis is meant to help answer that question. The most important analysis happens at the individual insurer level. Some form of introspection and analysis must occur within each insurer to confirm their locations within the realm of Leaders, Followers and Laggards. For a quick review, assess your own company against these definitions, below.

The Leaders: Companies that understand the market dynamics and have rapidly moved to planning and execution across most of the key areas.  They are focused on a two-speed strategy by investing in modernizing and optimizing today’s business, while also investing in the future business nearly equally. They are or have moved from legacy or non-platform core to cloud platform core solutions, leveraging an array of platform, digital and emerging technologies to elevate customer experiences, launch new products, expand channels and embrace ecosystems to transform the business.

The Followers: Companies that understand the market dynamics but are not moving as quickly or broadly into the various areas for planning and execution.  They are solidly focused on modernizing and optimizing today’s business, but less so than Leaders on the future business.  While they are relatively close in many areas to Leaders, the pace of execution when looking out three years is not the same, meaning that the gap will steadily increase.  Because of this, they may not recognize the danger in the gap until it is too late.

The Laggards: These are companies that generally understand the market dynamics but are clearly stuck in the past and have failed to rapidly move to planning and execution across the array of strategic areas.   They are not moving to new cloud platform solutions, or incorporating platform and emerging technologies.  They are keeping their business solely focused on the current business model, which lacks the level of automation, digital capabilities, and more, needed to meet the rising demands of a new generation of buyers.  If not already, they are approaching a downward spiral of relevance that will be nearly impossible to reverse.

Because Leaders are so far ahead, their investment will be substantially less than Followers or Laggards who have waited, hesitated, or just moved too slowly. Playing catchup is expensive – both in outlay of resources but also in lost opportunities.  The key is to confirm where you are, then never lose focus on it. Your organization deserves to know where it stands.

Fast-Tracking Transformations That Play to Your Strengths

The significant gaps between Leaders versus Followers and Laggards are becoming so great that there is a danger of Followers constantly trying to play catchup rather than their own game to win, and for Laggards entering an accelerating downward spiral. If you are still relying on the past and pre-digital age, pre-pandemic business models, now is the time to reevaluate.

It is time for bold moves.  It’s time to skip some of the traditional steps involved in transformation and pull in support systems that will help your organization play to its strengths. It’s time to ask the hard questions to the Mirror on the Wall!

Majesco has designed a transformation model that artfully and efficiently combines your industry expertise with the digital tools and ecosystem supports you need to make the leap forward.

Begin by assessing where you are in the Knowing-Doing Gaps, from our Strategic Priorities research, that defines Leaders who are accelerating digital transformation with resilient digital business models. Rethink and reprioritize your strategies to take advantage of the shift and opportunities unfolding. And execute on these priorities with a sense of focus and urgency.

[i] Buckingham, Marcus and Curt Coffman, First, Break All the Rules: What the World’s Greatest Managers Do Differently, p.164, Simon & Schuster, 1999

[ii] Johnson, Elsbeth and Murray, Fiona, “What a Crisis Teaches Us About Innovation,” MIT Sloan Management Review, November 30, 2020, https://sloanreview.mit.edu/article/what-a-crisis-teaches-us-about-innovation/

About Denise

Denise Garth is Senior Vice President Strategic Marketing responsible for leading marketing, industry relations, and innovation in support of Majesco’s client centric strategy, working closely with Majesco customers, partners, and the industry.

This blog originally appeared on Majesco.

Morristown, NJ – March 30, 2021 – Majesco, a global leader of cloud insurance software solutions for insurance business transformation, announced today that Irish Life, the largest life insurance company in Ireland, will upgrade to the newest version of the ClaimVantage Claims Management platform and move to the cloud to digitally transform their claims operation. ClaimVantage was acquired by Majesco.

Irish Life, the first customer of ClaimVantage in 2007, is a leading life and pensions company with over 1.3 million customers focused on helping their customers embrace change and build better futures through its innovative products and dedication to customer care. The growing demands of customers and the need to optimize the claims operation is a key driver in their digital transformation. The upgrade and move to the cloud will modernize and optimize Irish Life’s claims operation, elevate their Income Protection offering in the market, and enable them to rapidly adapt to new products to expand its leading market share in Ireland. Irish Life also uses Majesco Digital1^st® Insurance in support of their broader digital transformation and innovation program.

“Our commitment to customers to help them build better futures with our products and focus on customer care will be significantly enhanced with this upgrade and move to the cloud of the Majesco ClaimVantage Claims Management platform,” said Clodagh Elliott, Director of Corporate Business Operations. “As we continue to digitally transform our business, this new version will provide expanded and innovative capabilities that will drive operational effectiveness, but most importantly an enhanced, superior claims experience. We are looking forward to our continuing long-term partnership and excited about the possibilities for the future.”

Majesco ClaimVantage Claims Management provides an enterprise platform for the life, health and group benefits segment. It is built natively on the Salesforce Lightning Platform, with a focus on modernizing and optimizing claims operation by reducing the complexity of managing claims, providing pre-defined best practices and standardization across the claim life cycle.

“We are thrilled and honored to deepen and expand our partnership with Irish Life, our first customer who believed in our vision and strategy for claims transformation,” commented Stacy Varney, VP Sales at Majesco. “The upgrade and move to cloud will accelerate their digital transformation while driving operational effectiveness, enhanced customer experiences that will enable agility, speed and innovation as they continue their digital journey.”

About Majesco

Majesco, provides technology, expertise, and leadership that helps insurers modernize, innovate and connect to build the future of their business – and the future of insurance – at speed and scale. Our platforms connect people and businesses to insurance in ways that are innovative, hyper-relevant, compelling and personal.  Over 200 insurance companies worldwide in P&C, L&A and Group Benefits are transforming their businesses by modernizing, optimizing or creating new business models with Majesco. Our market-leading solutions include CloudInsurer® P&C Core Suite (Policy, Billing, claims); CloudInsurer® LifePlus Solutions (AdminPlus, AdvicePlus, IllustratePlus, DistributionPlus); CloudInsurer® L&A and Group Core Suite (Policy, Billing, Claims); Digital1st® Insurance with Digital1st® Engagement, Digital1st® EcoExchange and Digital1st® Platform – a cloud-native, microservices and open API platform; Distribution Management, Data and Analytics and an Enterprise Data Warehouse. For more details on Majesco, please visit www.majesco.com.

Contacts
Laura Tillotson
Director, Marketing Communications and Creative Services
+ 201 230 0752

Laura.Tillotson@majesco.com

March 25th, 2021

Let’s start with a warm-up exercise. Here are phrases you might find in any project meeting. Insert the missing words.

“The easiest way to start this project is to pick the [insert adjective] fruit.”

“That process is too convoluted. The shortest distance between Point A and Point B is a
[insert adjective][insert noun].”

“We need to modernize, but the metrics don’t support a complete platform change. We’re stuck between a [insert noun] and a [insert adjective][insert noun].

“Our competitors are going digital and they’re using it for [insert anything here]. They just partnered with [insert company] and now they are serving the [insert market] with their new [insert product].”

It might be an oversimplification, but insurance company growth lately is more about filling in gaps and blanks — capturing new or open opportunities with new products, partners and channels . Because risk management is the core of insurance, most insurers are very adept at managing risk to ensure underwriting profitability and customer satisfaction.  Digital technologies and greater real-time data access are both steadily advancing risk management expertise, while also helping customers reduce or mitigate risk.

It’s what’s missing in the technology/market mix that counts. Some organizations need to extend their expertise in filling market gaps and in using new technologies and partnerships to jump forward into new, open opportunities.

Majesco’s research uncovered this insightful detail: When insurance Leaders realize that they are missing a key component of their strategy, the blank gets filled in quickly. They shift seamlessly from knowing and planning into doing. They actively fill competitive gaps and when opportunity creates an opening, they jump into it.  This ability to jump into it, defines the difference between Leaders, Followers and Laggards in this report, Strategic Priorities 2021: Despite Challenges, Leaders Widen the Gap. We will look at some of these insights today.

Monitoring Gaps Highlights Competitive Discrepancies

Insurers’ competitive positioning used to be a brand and distribution focus. Now, distribution and the business are looking to technology, platforms and partnerships to give them a competitive edge. That edge, however, is shifting. Leaders are widening the gap with Followers and Laggards in several key areas.

When it comes to incorporating specific marketplace trends, technologies or capabilities into their business models or offerings, Laggards continue to fall further behind both Leaders and Followers. Their focus is on a very limited set of opportunities that do not even keep pace with the rest of the industry.

The Majesco survey asked companies to indicate their level of response, from “No focus on this” to “Already implemented,” for specific items within these categories:

• New market opportunities created by trends and technologies
• Platform technologies
• Digital capabilities
• Partnerships and ecosystems
• Regulatory developments

While companies cannot act on all of these issues at once, the inability to move from understanding to planning and execution is of increasing concern given the pace of change in the marketplace.  Companies that fail to incorporate these categories into their plans and execute on them are intensifying their operational and business risk.

Responding to New Market Opportunities

Continuous changes in technology-driven capabilities, customer behaviors and expectations and blurring market boundaries have created numerous opportunities for insurers to grow by creating new products and services and reaching new markets.  Followers and Leaders are fairly well aligned on their cumulative responses to the market opportunities created by these trends.

However, there is a sizable overall gap (35%) between Leaders and Laggards, led by enormous gaps in acting on Microinsurance (92%) and the Sharing/Gig Economy (86%), and developing New Insurance Business Models (59%).  These topics were not covered in the 2018-19 survey but in the 2019-20 survey, the gap between Leaders and Laggards was 22% and 7% for Leaders vs. Followers – reflecting a large increase in the Leader – Laggard gap.  Again, this supports the observation that Followers are doing their best to keep close to Leaders, but Laggards falling further behind.

Figure 1: Gaps between Leaders, Followers and Laggards in responses to market trends

Leveraging Platform Technologies

The most unexpected finding in this year’s survey was that Followers beat the Leaders in their cumulative levels of incorporating 16 different technologies into their offerings or capabilities. Although a small gap, just 5%, it represents a 17-point swing from last year, when Leaders held a 12% advantage.  We hope this continues into next year, putting Followers in a much better position to compete!

The gap between Leaders and Laggards remained relatively the same, at 15% last year and 17% this year.

Figure 2: Gaps between Leaders, Followers and Laggards in responses to technology trends

When we split these 16 technologies into three cohesive groups and compared the aggregate averages, you see that the Leader-Follower gap is driven by Technologies for Products and Services (11%) and Customer Experience Technologies (9%).  While not large, these topics are top of mind for leading, innovative insurers who are focused on the next generation of customers who demand different products and experiences.

Leaders and Followers are dead even in their overall levels of activity and response to Platform Technologies, improving from a 15% gap in favor of the Leaders last year.  Even more encouraging, Laggards nearly halved their gap with Leaders, from 22% last year to 12% this year. Leaders and Followers separate themselves from Laggards on two of the technologies: Digital Experience Platform (26%, 33%) and AI/Machine Learning (29%, 38%) while Leaders stand out from both on Microservices (30%).

The tightening of the gaps between all three is overall encouraging, particularly for Followers and Laggards, giving a ray of hope.  Reality appears to be sinking in that we are shifting to a new era of platform technologies.

Figure 3: Gaps between Leaders, Followers and Laggards in responses to platform technology trends

Implementing Digital Capabilities

This years’ area of specific focus was around digital capabilities and the results definitively highlight that this is the era and year of digital!  All three segments are implementing digital self-service options like chat and digital payments. While these tools have been around for some time, COVID made them table stakes.

These tools – while helpful and used by many “out of the box” portals as functional apps, like a claims app – do not in themselves meet the shift and customer expectation of personalized, holistic experiences.  This is where digital insurance platforms, a combination of digital experience and low code/no code platforms, transform these older approaches from siloed, separate transactions into next-gen satisfying, holistic experiences for customers, channel partners and employees, as we noted in our life and auto customer research.

Neither is it sufficient to simply add common, disparate digital capabilities like portals and think you can “check the digital box.”  Becoming a digital insurer requires a cultural change and mind shift to a new way of thinking, planning, and doing.  Leaders know this. They are using digital everywhere it counts.

Digital leaders are leveraging digital technologies to enhance customer and employee experiences and to improve their strategic and operational capabilities, as seen in Figure 4, with leads over the Laggards in Digital employee benefits onboarding and engagement (28%), Intelligent digital claims intake (22%) Innovative, personalized products (43%), Intelligent digital marketing (48%) and segmentation (61%), and Digital assets for reporting, modeling or compliance (35%).

Today’s customers are increasingly digitally adept, with higher expectations, different needs and a demand for better experiences that are not met with the “traditional” insurance approach, creating a fault line between customers’ expectations and insurers’ ability to deliver.  These digital gaps will become the new competitive differentiators.

Figure 4: Leaders, Followers and Laggards responses to developing/implementing digital capabilities

Partnerships and Ecosystems

The gap between Leaders and Laggards was the greatest for Partnerships and Ecosystems, at 71%.  The largest drivers of this disappointing and concerning gap are Setting up product(s) on a partner platform with revenue sharing (129%), White-labeling product(s) to be sold by another company (86%), and Establishing an ecosystem of partners using APIs (81%).

Insurers must increase their “doing” in this area to avoid lost opportunities to reach new or underserved markets and to be at the forefront in establishing partnerships before others.  We highlighted this opportunity in our joint research with PIMA last year.  Laggards’ failure to recognize the criticality of partnerships and ecosystems is a major blind spot.

Our research, as well as numerous other studies, have shown strong customer interest in buying insurance through other partnerships and channels.  Furthermore, the development and access to APIs to connect to new partnerships and ecosystems is increasingly important to be considered.

In this new era of insurance, nearly every insurance process is rapidly becoming frictionless, including buying. If distribution channels are easy to use with products that are easy to understand, then insurance has the opportunity to grow through a friction-free, multi-channel distribution system. The benefit of adapting to these channel dynamics is that we move from needing to “sell” people on purchasing insurance, to introducing insurance that is ready to be “bought” seamlessly at the point of need, creating a scale-able, sustainable business model.

Figure 5: Gaps between Leaders, Followers and Laggards in responses to partnerships & ecosystems

While both Laggards and Followers closed the gap with the Leaders last year, each saw those advantages disappear this year. The Leader-Laggard gap was a staggering 4x increase over last year’s gap of 18% and the Leader-Follower gap increased 3x.  This does not bode well for both Followers and Laggards – limiting their market reach and growth.

Market boundaries are no longer clear. They are shifting and, in some cases, evaporating. The combination of technology and customer expectations is directly impacting insurance by altering the traditional ecosystem of agents and brokers – who, yes, are still relevant – to have insurance embedded or sold differently across a broader ecosystem including automotive, transportation businesses, big tech and more.

By doing so, these partners are breaking down business and market boundaries to make the ecosystems operate fluidly, based on the customer’s needs and expectations for both the risk product and other value-added services. This, in turn, creates greater value for these insurers due to new revenue streams and access to a broader market through the multiplier effect.

Given the rapid development of ecosystems, shift to a platform economy, and increased focus on a broader customer experience dependent on partnerships, these gaps offer Leaders, who are actively working with ecosystems and partnerships, the opportunity to accelerate and tie down relationships while Laggards and Followers get left behind.

Using Regulatory Scoring to Push Transformation Agendas Forward

Within every insurer, there are those who wish to move faster than the company traditionally moves. It’s a frustrating position to be in. For transformation-minded executives who find themselves in the Follower or Laggard categories, it might be helpful to document all of the potential value and incentives that your organization stands to gain. One of the incentives on the list must be to improve their ratings standing with AM Best.

Compared to the other Doing categories, responding to the AM Best innovation rating criteria and participating in a state-sponsored innovation sandbox have among the lowest levels of activity by all three segments. The 24% Leader-Laggard gap increased slightly from last year’s 17% gap, while the Leader-Follower gap remained flat compared to last year’s 7% gap.

Innovation initiatives are increasingly laser-focused on creating competitive advantages that respond to the rapidly shifting marketplace and adoption of digital technology.  As a result, innovation has moved from an operational to a strategic imperative in order to solidify market leadership by outpacing competitors, and by challenging disruptors to ensure long-term survival and success.  From this viewpoint, it is surprising that insurers are not more actively planning or executing strategies that take advantage of these regulatory changes to accelerate their innovation initiatives.

We believe the “knowing-doing” gap and the paths an insurer takes for the future, including leveraging the sandbox opportunities, will have a direct relationship with their innovation capacity and ability, two crucial elements of the new AM Best innovation score. Forward-focused insurers should use this pressure to their advantage.

Figure 6: Gaps between Leaders, Followers and Laggards in responses to regulatory innovation developments

When it comes to opportunities, insurers, even Laggards, should remain optimistic. It isn’t too late to take advantage of the technologies, platforms, partnerships and regulatory stimulants that can move your organization into the future.

COVID-19 has been a global crisis, but it has also given insurers new opportunities for the post-pandemic market. Is your organization using this time of crisis as a wake-up call to position your company for the future? How would you fill in the gap and space?

In our next blog, we look at the role of optimism within a strategy for growth. What are companies like yours considering for the next three years? Can it help to look at the complete industry with different eyes? Be sure to get the complete picture by reading, Strategic Priorities 2021: Despite Challenges, Leaders Widen the Gap.

About Denise

Denise Garth is Senior Vice President Strategic Marketing responsible for leading marketing, industry relations, and innovation in support of Majesco’s client centric strategy, working closely with Majesco customers, partners, and the industry.

This blog originally appeared on Majesco.

March 18th, 2021

Competitive gaps aren’t normally the result of just one issue. They are a matter of dozens of little challenges that all add up to tremendous competitive pressure. COVID-19 has exacerbated many of the challenges that have been driving Leaders, Followers and Laggards further apart. Once the gap begins to grow, it’s tough to reverse momentum and close the gap.

Business with a Blindfold

The REAL issue, however, is that most insurers don’t know why there is a gap — there are so many factors to consider, many inter-related. Laggards may have a vague sense of what is holding them back. Followers may be trying to emulate or catch up to Leaders without a complete understanding of what it will take. Even Leaders may not hold the right perspective on what is keeping them ahead. It’s a dangerous spot to be in. Are insurers safely in the center of market demand, balanced with internal/external alignment, ready to capitalize on opportunities? Or…are they so far off center that they are standing on the edge of a cliff? Most executives would like to know where they stand.

Last week we began looking closely at how insurance innovation has been invigorated by the COVID-19 crisis. Insurers have been scrambling to respond, picking up the pace of business transformation planning and doing. Majesco’s latest thought-leadership report, Strategic Priorities 2021: Despite Challenges, Leaders Widen the Gap, carefully examines real levels of knowing, planning and doing among surveyed insurers. The goal of the report is for insurers to weigh their own organizations against those surveyed to uncover where they are on the spectrum and then to adjust their planning and priorities to take the necessary steps to become Leaders and to stay in the lead.

Gaining Perspective

The first step in successfully responding to change and disruption is awareness and appreciation of internal and external challenges and knowing where your organization stands on each one relative to critical internal (e.g. strategic objectives) and external (e.g. current competitors) reference points.  Leaders reveal advantages over Followers and Laggards in their focus on internal and external challenges reflected in the sizable gaps revealed in our Strategic Priorities research.

Internal Challenges

The 21% cumulative gap between Leaders and Laggards on 11 internal challenges was driven by large differences on several individual challenges, including Change management (41%), Digital capabilities (40%), Aligning IT and business strategies (31%), Legacy systems (28%), and Data & analytics capabilities (26%).   Digital capabilities gap highlights the unpreparedness of Laggards for rapid change in a digital world, and one that increasingly makes them uncompetitive.

Interestingly, the two segments were identically aligned on Aging workforce/retirements, which was 10% ahead of Followers.   This is not surprising given the significant legacy business processes, channels and systems dependent on those reaching retirement.  The only other meaningful gaps, each at 16%, are in Post-COVID work environment (covered above) and Budget. Otherwise, Followers are generally keeping pace with Leaders with only a 7% cumulative gap. (See Fig. 1)

Figure 1: Gaps in levels of concern about internal challenges

Evidence of Followers’ concentrated efforts to keep pace or narrow the gap with Leaders over the past three years is evidenced in a big jump in the gap from 2018-19 to 2019-20, followed by the gap being cut by 50% this year. In stark contrast, the gap for Laggards on internal challenges nearly doubled.

Switching the Benchmark

Some insurers will look at these internal challenges and say, “Well, we know what our issues are. We just need to address those issues and we’ll move back into a competitive position.” It is not that simple.  Unfortunately, it is the external issues that are driving much of the pressure and many insurers don’t completely understand how the external impacts the internal. Before we begin looking at the external pressures and how to close the gap, we should look outside of insurance for a moment at the concept of the benchmark.

In the world of investing, certain investments, such as mutual funds, use benchmark funds. The benchmark fund is a sort of mirror for mutual fund investing. If your fund beats the benchmark fund, it’s doing well. If it doesn’t match the benchmark, something might be wrong. But the two funds are normally very close in nature with an equivalent distribution across investment types.

But what if someone took one of your mutual funds and swapped the benchmark fund with an outrageously high performing fund that is focused on new market trends and demands and looked nothing like your fund at all? Would you disparage your efforts, or would you reassess your market focus and trade your investments in to find investments that look like the new, impressive benchmark?

This is essentially what is happening within insurance right now. The benchmarks that we have been using (familiar traditional competitors and similar companies within insurance) are becoming less relevant as growth indicators. There are new sources of competition in the market that are reshaping the business of insurance and have the potential to make our past investments look sub-optimal. Do we invest to hit outdated benchmarks, or do we wake up and recognize a new level of competition?

Acknowledging the potency of the new insurance benchmarks is what will spur insurers to make the investments that will close the gap. With that in mind, let’s look at the external challenge gaps.

External Challenges

The gap between Laggards and Leaders is larger relative to external challenges (Figure 2). One of the largest gaps is around new sources of competition (new benchmarks!). This is a dangerous blind spot.

In particular, the gaps between Laggards and Leaders are nearly 50% for these four challenges:

• New competition from InsurTech, startups, MGAs, etc.: 48%
• The rise of direct sales (B2C & B2B): 46%
• New competition from tech giants from outside the insurance industry: 43%
• Increasing competition from traditional insurance competitors: 42%

Followers are more aligned with Leaders on these four, though are behind on New competition from InsurTech (12%) and The rise of direct sales (10%).  In fact, their relatively small 9% cumulative gap to Leaders is somewhat obscured by an “averaging out” of small single-digit gaps on six of the issues, and slightly larger double-digit gaps on the other six issues, something we did not see in the internal challenges. The largest gaps for Followers suggest potential blind spots that must be addressed to keep pace with Leaders:

• COVID impact on target markets: 26%
• Pace of change: 16%
• Changing customer expectations: 13%
• Growing market availability of new/innovative insurance products: 12%

Figure 2: Gaps in levels of concern about external challenges

Despite this somewhat bifurcated set of external challenge gaps, Followers cut the gap with Leaders by nearly 50% compared to last year’s survey — likely recognizing new benchmarks! But, laggards continue to fall further behind as their gap to Leaders grew by over 50% from 22% to 35% over the past 3 years.

Game-Changing: Planning for a 2-Speed Strategy

Success in moving from the past to the future of insurance requires a two-speed strategy: Speed of Operations, which focuses on making improvements to the current, traditional business model with next-gen, mature systems and processes; and Speed of Innovation, which is all about creating agile, fast and new business models that explore, test and grow new business opportunities.

In Majesco’s report, we find that Leaders continue to distinguish themselves with a stronger focus on strategic initiatives that support both components of the two-speed strategy.

Speed One:  Modernize and Optimize Today’s Business

Drilling into the specific elements of Modernize and Optimize reveals a large gap of 35% between Leaders and Laggards. The two key drivers of this gap are Developing a Digital Strategy (45%) and Scaling the business on a cloud platform (60%). Surprisingly, Followers also have a sizable gap to Leaders on this last one of 34%, more than double the size of the overall gap of 15%.

The gap around cloud platform is of particular concern.  In our new digital age, technology and the business are fundamentally inseparable. Cloud technology is now a given, APIs enable technology to be easily componentized, AI and ML help the business to make “smart” decisions, digital experience creates unique and personalized engagement, and no code / low code eliminates complexity and accelerates the digital transformation journey as we outlined in our report, Insurance Platforms – The Digital and No Code/Low Code Platform.

SMA has tracked cloud adoption over the past eight years. In their P&C Core Systems Purchasing Trends report, they noted that 2018 was a watershed year with three in four new core systems deployed in the cloud.[i] And in 2019 they reported that adoption hit a new high-water mark, with 84% of new core systems deployed in the cloud.  They note that cloud is now a fundamental requirement in the digital world, and it is growing as we move into the new era of computing where every new technology trend, from AI and big data to microservices and the connected world, is increasingly dependent on cloud.

Figure 3: Gaps between Leaders, Followers and Laggards in Modernize & Optimize priorities

The Modernize and Optimize gap between Leaders and Laggards significantly grew from 9% to 35% over the past 3 years, continuing the theme we’re seeing of Laggards falling further and further behind. Leaders are constructing future-ready platforms. Followers are moving, but less quickly. Laggards are barely moving off of the status quo.

Speed Two:  Create a New Business for the Future

When we consider finding new benchmarks for our industry, it only makes sense that established insurers must respond to new, tech-savvy competitors by wielding innovative new business launches. When it comes to new business creation, Laggards fall drastically behind, with a massive gap of 84%!  The gaps in the individual strategic initiatives range from a low of 50% for Innovation (which was a new addition this year) and 152% for Accessing New Capital Markets. The access to new capital markets is a challenge for many of the mutual insurers, limiting what they can do, particularly in an era of significant capital that is being invested in InsurTech and other digital, technology businesses.

Large gaps in Engagement/partnerships with InsurTechs (94%) and Adding/offering new non-insurance value-added services to customers (80%) are also strong evidence of Laggards’ shocking weakness in speed of innovation.  This gap reflects their focus on the past, rather than the future – a dangerous blind spot that suggests dim prospects for continued relevance or survival. A quick re-focus and a two-speed business strategy is the only strategy that can close this gap because we need today’s business to be successful so that it can also fund the new business

Figure 4: Gaps between Leaders, Followers and Laggards in Create a New Business priorities

The differences in planning priorities between Leaders, Followers and Laggards stand out in Majesco’s research.  While many Followers may be keeping relative pace to Leaders with their modernizing and optimizing the existing business, often reflected in strong financials, this is deceiving when considering the future business needed – where Followers and Laggards are not planning effectively, and are falling further behind.

Leaders continue to distinguish themselves from the other two segments with their stronger focus on strategic initiatives that support the two-speed strategy.  The rest of the insurers must accelerate their planning and turn it into doing to remain relevant, let alone be viable for the future.

Is your organization pursuing a two-speed approach to modernization, optimization and innovation? Are you waking up to new benchmarks and realizing that something needs to change? Majesco Digital1^stÒ Insurance is a cloud-based platform for rapid transformation and new business development. It meets mission-critical needs for digital customer engagement and improved digital ecosystem participation.

In our next blog, we go beyond Knowing and Planning to discuss actual implementation activity. How are insurers accomplishing a two-speed strategy that will accelerate digital transformation? Where are insurers lagging behind customer expectations? We’ll share new statistics on trends and technologies that are helping Leaders to become the new benchmarks for the insurance industry. For even more detail, download Strategic Priorities 2021: Despite Challenges, Leaders Widen the Gap.

[i] “P&C Core Systems Purchasing Trends: Foundational Technology to Fuel the Transformation Journey,” Strategy Meets Action, May 2019.

About Denise

Denise Garth is Senior Vice President Strategic Marketing responsible for leading marketing, industry relations, and innovation in support of Majesco’s client centric strategy, working closely with Majesco customers, partners, and the industry.

This blog originally appeared on Majesco.