Commercial lines plans to step up to the digital plate in 2019

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Given that this blog is coming out in January, a baseball reference in the title might seem a wee bit out-of-season. Should it be a football reference? Perhaps. But SMA’s recent report, 2019 Strategic Initiatives: P&C Commercial Lines, is future focused. So, aligning this blog to an upcoming sports metaphor makes sense to me.

Title explanation aside, SMA’s commercial lines research results expose some significant areas where commercial lines organizations are truly bringing out the big bats. If you are accustomed to words such as “trailing,” “behind the curve,” and “lagging” when it comes to commercial lines technology adoption – 2019 represents a new world. Get accustomed to words such as “transformation,” “innovation,” and “adoption.”

Yearly, SMA surveys insurers about their upcoming strategic initiatives. In all, thirteen strategic initiatives are targeted – four being foundational strategic initiatives – core transformation, business intelligence, innovative products/services, and restructuring the workforce. The larger category consists of the transformational strategic initiatives – digital transformation, big data and advanced analytics, innovation, customer experience, InsurTechs, distribution, new business models, greenfield insurers, and emerging technologies.

There are numerous insights revealed throughout the survey results. However, three initiatives clearly stand out, and the results show that commercial lines insurers aren’t sitting on their laurels – significant change is afoot!

- Customer Experience: In 2018, 97% of insurers indicated some level of activity, with 37% developing strategies, 40% in initial implementations, and 20% with broad deployment. In 2019, 91% of insurers indicated activity, a drop of 6% points. However, this is not a bad-news scenario because the initial implementation and broad deployment percentages increased. For commercial lines, the customer can be both the end consumer as well as the distributor, so this is a very big topic, with segmented responses. But insurers are stepping up to this plate to address needs and opportunities!

- Innovation: 2018 and 2019 activity results are very similar: 93% and 95% respectively. No two insurers are approaching innovation in the same way, but the activity is notable – innovation labs, hackathons, innovation executives, new organizational structures, and collaboration technologies to name a few. Innovation in commercial lines is here to stay!

- Digital Transformation: This is the big winner, with 100% of commercial lines insurers indicating activity. Digital transformation isn’t just for personal lines or individual consumers. Business owners are expecting digital support, as are internal cohorts from underwriting to loss control to claims. In 2018, 16% of survey respondents indicated broad deployment of digital capabilities. In 2019, the number is 34%. Commercial lines organizations are reacting to urgent needs in this area.

While the above results are very exciting and positive, there is still work to do – so no one is going to be bored. Emerging tech, distribution partnerships, InsurTech, and new business models all have very low broad distribution percentages – 13% or less. However, strategies are in the planning stages. In 2019, small business, workers’ comp, and specialty lines insurers are stepping up to the plate first. But the bullpen is full, and very few are sitting on the bench. Commercial lines should have a great season in 2019!

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