On January 25th, 2023, I hosted the first Aite-Novarica Women’s Network meeting of the year on the topic of trends in insurance. I was joined by fellow Aite-Novarica Group Senior Principals Carey Geaglone and Deb Zawisza as well as Aite-Novarica Group’s Head of Property & Casualty Martina Conlon as we shared our perspectives on current trends in insurance for 2023.
In our discussion, we summarized new Aite-Novarica Group research on insurers’ IT priorities for the coming year, developments in the insuretech ecosystem, and overall trends in the industry for both P/C and L/A/B carriers. To read these research reports in full, visit our website. Here are the key takeaways from our meeting.
Insurer IT Budgets and Priorities for 2023
Insurers anticipate slightly higher IT spending for 2023, but much of this increase is driven by rising staff and services costs. P/C insurers are prioritizing analytics and insights, distributor support, and ongoing transformation projects. By far, the highest priority projects for large P/C carriers are core PAS replacements, with most activity in ongoing replacement projects.
L/A/B insurers are continuing to prioritize strategic technology efforts while increasing their focus on cost and risk control. Digital capabilities are their top priority, which has been consistent year over year in the life space. The pandemic showed the need for digital capabilities, not just for consumers but for agents who remain a key part in the relationship with the consumer.
Both P/C and L/A/B insurers identified talent attraction and retention as anticipated challenges for the year. Speed to market is also a top priority, given the market changes and shifts influenced by the pandemic and economics.
The New Insurance Ecosystem
The explosion of insuretech solutions in the last five years has made it complicated for insurers to navigate the broad range of solutions. Point solutions that provide a variety of features and functions across the entire insurance value chain are extending core systems and redefining the insurance system landscape. It’s important for insurers to determine where they want to make investments and what will help them meet their business goals. Aite-Novarica Group’s new insurer ecosystem framework can help demystify the landscape and provide insurers with a framework for assessing ecosystem capabilities to meet business and technology goals.
Top 10 Trends in Insurance for 2023
Our panelists wrapped up the discussion by providing a brief overview of the top 10 trends for both P/C and L/A/B insurers for 2023. A key trend across insurers for 2023 will center around talent attraction and retention, with particular focus on institutional knowledge transfer. We anticipate many P/C insurers will increase investment in IT to implement new technologies that improve operational efficiencies, increase revenue, and enhance customer experience. L/A/B insurers this year will focus on improving customer engagement and building strong relationships, making it easy for distribution partners to do business, and lowering operating costs.
Our next Aite-Novarica Women’s Network virtual meeting, titled “Having a Career and Having a Life,” will take place on February 28th at 2 pm ET and be led by Aite-Novarica Group Senior Principals Nancy Casbarro and Carey Geaglone. More information is available here.