In a world of rapid change, the gap will at some point become unsurmountable
Morristown, NJ – April 20, 2017: Majesco (NYSE MKT: MJCO), a global provider of core insurance software and consulting services for insurance business transformation, today published the second annual strategic priorities primary research report, Strategic Priorities 2017 – Knowing vs. Doing. The report addresses to key questions: Are we acting upon our knowledge of the insurance industry and market trends? Or, are we simply educated observers?
The answers to these two questions form the crux of Majesco’s second annual Strategic Priorities survey. The responses to the survey reflect an awareness of the pace of change that is unfolding unheralded challenges and opportunities. Unfortunately, turning awareness into doing, with actionable initiatives, is elusive, creating an ever-widening gap between leaders who are taking action and those who are not.
“In a world of rapid change, the gap between leaders and fast followers or laggards will at some point become unsurmountable,” commented Denise Garth, Senior Vice President Strategic Marketing at Majesco. “The path of least risk will include taking some risks. The risk to invest in new business models, new products, and new channels can, at minimum, keep insurers competitive. Even better, taking these risks could allow insurers to leapfrog the competition. Because new competition does not play by the traditional rules of the past, insurers need to be a part of rewriting the rules for the future. There is less risk in a game where you write the rules.”
The report links the forces of change identified in Majesco’s Future Trends 2017: The Shift Gains Momentum report and the consumer and small-medium business research reports, with the reality of how insurers are responding, both in terms of planning as well as doing, highlighting a significant gap. The report notes that the insurance business models of the past 50+ years have been based on the business assumptions, products, processes, channels, and more, for the Silent and Baby Boomer generations. Gen X was the first to begin to shift, with Millennials and Gen Z putting tremendous power behind it to move it forward at a rapid pace. The business models of the past will not meet the needs or expectations of the future. Unfortunately, those initiatives where insurers are actually doing something tend to be those that are traditional areas of priority and understanding, like security, talent and legacy system replacement rather than those that are transformational and require new thinking, different approaches and different business models.
The report also highlights some interesting differences between the L&A and P&C market segments. The L&A segment has been relatively slow to change, even seeming to be dormant with replacing legacy systems. This is in contrast to the P&C segment, where carriers have been aggressively replacing legacy systems. Interestingly, it is the L&A segment that seems to be more attuned to the pace of change and is responding with plans and action as compared to the P&C segment. This is creating an interesting industry dynamic.
Those that adapt quickly will likely see new business heights, contrasted to a potential death spiral among those who do not adapt. This is reinforced in an “early trend” that highlights higher growth potential for those focused on innovative areas. Companies that reported strong growth in the past year were up to 17 times more likely to be actively engaged in innovative growth activities, compared to those that had lower growth. If the growth gap creates a wide enough chasm, devastating business results will be seen, in similar fashion to what we have witnessed with organizations such as Sears, Blockbuster, Macy’s, and others.
Insurance business transformation is a journey of change and revitalization, a renaissance of Insurance. Approximately 150 insurance companies worldwide in P&C, L&A and Group/ Employee Benefits are transforming their businesses with Majesco’s solutions. Our market leading software and consulting services uniquely underpin the entire insurance value chain and are designed to empower insurers with the agility, innovation and speed needed to meet their transformation opportunities. Majesco’s solutions include policy management, new business / underwriting, rating, billing, claims management, distribution management, BI/ analytics, predictive modeling, digital platform with mobile and portal, testing services, cloud services, bureau and content services, transformation services, consulting services and more. For more details on Majesco, please visit majesco.com.