14 – 18 October 2018 / Orlando, FL

Digital Insurance and the CIO:

New Roles and Responsibilities
Are a Must!
Kimberly Harris-Ferrante

© 2018 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. and its affiliates. This publication may not be reproduced or distributed in any form
without Gartner's prior written permission. It consists of the opinions of Gartner's research organization, which should not be construed as statements of fact. While the information contained in this
publication has been obtained from sources believed to be reliable, Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Although Gartner research
may address legal and financial issues, Gartner does not provide legal or investment advice and its research should not be construed or used as such. Your access and use of this publication are
governed by Gartner’s Usage Policy. Gartner prides itself on its reputation for independence and objectivity. Its research is produced independently by its research organization without input or
influence from any third party. For further information, see "Guiding Principles on Independence and Objectivity."
Digital Is Rewriting the Future of the CIO

The CIO role must evolve and may be even

1
eliminated by 2025
© 2018 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. and its affiliates.
Key Issues

1. How is digital insurance redefining the insurance industry?

2. How will the IT organization need to evolve to meet the requirements
of the digital insurer?
3. What will be the roles and responsibilities of insurance CIOs
in 2020?

2 © 2018 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. and its affiliates.
Key Issues

1. How is digital insurance redefining the insurance industry?

2. How will the IT organization need to evolve to meet the requirements
of the digital insurer?
3. What will be the roles and responsibilities of insurance CIOs
in 2020?

3 © 2018 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. and its affiliates.
Digital Maturity Levels in the Insurance Industry …

Level 0 Level 1 Level 2 Level 3 Level 4 Level 5

Alien Embryonic Beginner Intermediate Progressive Leader

Piloting Sophisticated
digital multichannel
Focus on business Mature management
Digital bimodal IT
strategy some aspects models and
of the value technologies capabilities
No formal is work
in progress chain
digital
strategy Digital
Considerable leadership
Digital amount of established Agile
"silos" legacy innovation
Strong management
Absence of digital
leadership value
proposition
No Enterprisewide
digital Limited near- Sophisticated “digital-first”
KPIs or real-time digital KPI strategy
Limited digital framework
revenue capabilities
Few KPIs

4 © 2018 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. and its affiliates.
Maturity Is Low in Insurance

Level 0 Level 1 Level 2 Level 3 Level 4 Level 5

Alien Embryonic Beginner Intermediate Progressive Leader

Piloting Sophisticated
digital multichannel
Focus on business Mature management
Digital bimodal IT
strategy some aspects models and
of the value technologies capabilities
No formal is work
in progress chain
digital
strategy Digital
Considerable leadership
Digital amount of established Agile
"silos" legacy innovation
Strong management
Absence of digital
leadership value
proposition
No
digital 49% Sophisticated
Enterprisewide
Limited near- “digital-first”
KPIs digital KPI
34% Limited digital or real-time
framework
strategy
revenue capabilities
14%
Few KPIs
1% 2%
Source: Gartner, June 2018 (n = 129)
5 © 2018 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. and its affiliates.
Radical Changes Need to Happen to Drive Digital Maturity
Use technology to do Change the insurance Change the definition of insurance; New
insurance processing processes; process processes, products and vision including
faster and better — optimization autonomous and algorithmic business
incremental change

Level 0 Level 1 Level 2 Level 3 Level 4 Level 5

Alien Embryonic Beginner Intermediate Progressive Leader

Intelligent RPA; Innovation and

data mastery digital lead;
RPA for development; AI-driven
speed/automation; analytics and AI workforce;
introduction of pilots; robotic mastery &
advanced data-driven no touch
analytics; decisioning and processing;
Minimal process
omnichannel intelligence integrated
Channel refresh; automation; cost
development; processing; ecosystems;
agency- reduction:
siloed process innovation labs new business
connectivity and Efficiency driver;
improvements and culture models;
automation; BPM; portal and mobile change begin digital business
manual development ecosystem platform
processing and development enablement
people-lead digital customer
Little to no IT
engagement
innovation;
platforms
legacy-driven
Key Issues

1. How is digital insurance redefining the insurance industry?

2. How will the IT organization need to evolve to meet the requirements
of the digital insurer?
3. What will be the roles and responsibilities of insurance CIOs
in 2020?

7 © 2018 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. and its affiliates.
The CIO POV: Digital Has Redefined IT

78% of CIOs report that of role of the CIO is more demanding than it was two years ago

IT before “digital”: IT after “digital”:

 IT as enabler  CIO as a business leader with a seat
 IT’s focus was keeping systems at the table to drive/build strategy
running and available  One business strategy which leverages IT
 CIO as a “doer”  Faster pace and speed of change
 IT has own strategy  Outside-in thinking
 Inside-out thinking  Everyone knows IT
 IT is a specialized center  Requires agile and bimodal approaches
 IT as waterfall  Strong partnership with marketing
 No/Limited work with marketing  Digital first mentality

Source: Gartner CIO interviews 2017-2018, n = 50

8 © 2018 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. and its affiliates.
A Digital Business Technology Platform Is Needed for
Digital Insurance Success

A new customer experience model Data mastery and improved intelligence

Process automation and transformation IT systems to support product innovation

Open and agile IT environments for

A virtual workforce
ecosystem support

9 © 2018 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. and its affiliates.
Scaling of Digital Business Into Ecosystem Participation
Necessitates New Roles in IT
Existence of New, In-Demand IT Roles
Insurance (n = 140)

Cybersecurity Expert 61%

User Experience Designer 43%
Algorithm/Model Designer 33%
Top CIOs create roles for
Chief Analytics Officer 26% business ecosystem
participation
API Product Manager 26%
Cloud Architect 24%
Mega-vendor Manager 24%
Digital Workplace Leader 21%
None of the above 18%
Digital Risk Manager 16%
Voice Interaction Designer 4%
Machine Trainer 3%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Base: Excludes DK; n varies by segment. Percentage of Respondents
Multiple responses allowed
Which of these roles (or equivalents) exist in your organization?
Source: Gartner 2019 CIO study, n = 140
10 © 2018 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. and its affiliates.
Digital Insurance = More Demands for the IT Department
Plus …
Digital business strategy
Customer insight and channel
development
Analytics and data management
Cybersecurity
Vendor/Partner management Legacy,
IT infrastructure,
app dev.,
app maintenance

11 © 2018 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. and its affiliates.
Matching Business Vision With Technology Adoption

Business Innovation Profile Technology Adoption Profile

We are mainstream
players — we adopt Aggressive
new industry trends and
Conservative 14%
directions only once We are
they are proven pioneers — 28%
18% we are first in
leading new
industry trends
and directions
36%

We are fast
followers — we take
emerging industry Mainstream
ideas and directions, 58%
extend, expand and
exploit them
46%

Source: Gartner CEO Study 2018 (FS sample); Gartner/ACORD Study 2017
12 © 2018 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. and its affiliates.
Key Issues

1. How is digital insurance redefining the insurance industry?

2. How will the IT organization need to evolve to meet the requirements
of the digital insurer?
3. What will be the roles and responsibilities of insurance CIOs
in 2020?

13 © 2018 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. and its affiliates.
 The Insurance CIO: Master of Many Domains

“Changed
significantly because “Today talk about
in the past ‘technology-
IT was a necessary enabled business
evil to keep systems strategy’
going and keep versus ‘business
them available and strategy which was
responding. aided by
Now engaged at the technology’”
business level.”

Source: Gartner CIO interviews 2017,-2018 n = 50

14 © 2018 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. and its affiliates.
The Technology Advisor: Guiding Good Investment
Decisions
63% of financial services CEOs state that they have a management initiative
to make the business more digital
Largest Amount of New or Additional
Reducing Funding the Highest Amount for 2019
Funding for 2019

Business intelligence or data analytics solutions Infrastructure and data center

Core system improvements/transformation Network, voice and data communication

Communications/Connectivity (including Wi-Fi and
Customer/User experience
internet access)
Cyber/Information security
Digital business initiatives (including
digital marketing)
Average budget changes in insurance 2017 to 2018 = 3.2%
Source: Gartner 2018 CEO Study; Gartner CIO Study 2019, Gartner CIO Study 2018
15 © 2018 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. and its affiliates.
The Balancer: Ensuring Proper Prioritization
Life: P&C:

Digital:

16 © 2018 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. and its affiliates.
The Emerging Technology Advisor: Emerging
Technologies and How They Shape the Business
What are your organization’s plans in terms of the following digital technologies and trends?
(“Have already deployed + will deploy in next 12 months” summary)
92%
Percentage of respondents

48%

34%

19%
14% 12% 10% 8%
3% 2% 0%
Cybersecurity Artificial Conversational Robot/ Blockchain/ Edge Immersive Digital Twin Quantum Autonomous 3D Printing
Intelligence Platforms Drone Distributed Computing Experience Computing Vehicles
(AI) Swarms Ledger (Virtual Reality/
Augmented
Reality/
Mixed Reality)

Source: Gartner CIO study, new, Gartner CIO study 2019

17 © 2018 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. and its affiliates.
The Business Leader

Gartner Business Model How involved are you as CIO in the design of
Framework your organization’s business model — the way
it creates, delivers and captures value?

Driving current and future

sales, market share, and 3.1
profits

Designing the ways your

enterprise delivers value to 3.8
your consumers

Defining your enterprise’s

3.6
value proposition

Source: Gartner CIO study 2019

18 © 2018 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. and its affiliates.
The Jack of Many Trades: Get More Active Outside of IT

73%
of insurance CIOs report that they have taken
on responsibility outside of IT

Top Roles
Digital transformation (CDO role) 38%
Innovation 36%
Enterprise change (16%)
Shared services (beyond IT) 16%
Digital sales/E-commerce 16%

Source: Gartner CIO study 2019

19 © 2018 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. and its affiliates.
The Internal Politician: Learn the Language of New
Buying Centers

Chief Digital
Officer

Chief Data
Chief Data Officer
Scientist

Chief Innovation Chief Analytics

Officer Officer
Chief
Transformation
Officer

20 © 2018 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. and its affiliates.
The Innovation Leader

 Ideation leader
 Innovation lab leader
 Business process team member
 Insurtech advisor
 VC advisor
 Virtual workforce master
 Business strategy contributor

21 © 2018 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. and its affiliates.
The Talent Ambassador

“… shifting from a software What would you say is the biggest talent gap (i.e., lack
house to an engineering firm” of skills) related to information, technology or digital business
your company is trying to fill at the moment?
“… refactor applications PROJECT/PROGRAM MANAGEMENT 6%
for the cloud” SPECIFIC TECHNICAL SKILLS 7%
SECURITY & RISK 9%
“… retooling employees
INNOVATION/CREATIVITY 9%
for agile and scrum”
OVERALL LACK OF SKILLS/KNOWLEDGE 10%

“… talent war” BUSINESS/SYSTEMS ANALYSTS 12%

BUSINESS KNOWLEDGE/ACUMEN 17%

“… competing with insurtechs” PROGRAMMERS/DEVELOPERS 18%

DIGITAL BUSINESS/DIGITAL MARKETING 20%

“… have to be a talent INFORMATION/ANALYTICS/DATA

SCIENCE/BUSINESS INTELLIGENCE 33%

ambassador” Percentage of Respondents

Source: Gartner CIO interviews 2017, n = 50 Source: Gartner CIO study, 2017. n = 124 global P&C and life insurers
22 © 2018 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. and its affiliates.
Get Ready for More Change … but Don’t Forget Your
“Day Job”
61% of financial services CEOs state that they likely to make any change to its business model
(how it creates, delivers and captures value in its markets) in the next 3 years
How satisfied do you believe your IT
organization’s stakeholders are with …
Mean Score on a Scale of 1 to 5
5.0

4.0
3.2
3.0 2.9
3.0

2.0

1.0
IT service delivery IT-enabled business cost IT-enabled business
optimization innovation

Source: Gartner 2018 CEO Study; Source: Gartner CIO Study, 2017. n = 124 Global P&C and Life Insurers
23 © 2018 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. and its affiliates.
Looking Ahead: Prepare for the Challenges Ahead!

Insufficient funding/budgets to pay for digitalization efforts 18%

Weak change leadership/planning/execution 20%

Organizationally we are not innovative enough 25%

Insufficient depth/breadth of digital skills 31%

Technology challenges blocking change (legacy, security, etc.) 33%

Insufficient numbers of IT/business resources 34%

Business cultural blocking change 36%

Source: Gartner CIO study 2019

24 © 2018 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. and its affiliates.
Recommendations for Insurance CIOs

 Strengthen your business acumen through creating stronger partnerships

with the business and becoming more educated on industry trends.
 Implement a technology review process to assess emerging technologies
and their business impact and provide recommendations on both strategies
and investments. Share with the company regularly.
 Build and execute an HR strategy for hiring, recruitment and training
immediately! Identify skills that are needed short- and long-term and change the
IT’s structure to make your organization more attractive.
 Sponsor innovation across the company through the development of innovation
labs, competitions and idea sharing. Build KPIs to assess your contribution
to innovation. Don’t wait for your manager to ask you!

25 © 2018 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. and its affiliates.
 Be a Digital Superhero

Source: Gartner CIO interviews 2017,-2018 n = 50

26 © 2018 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. and its affiliates.
Recommended Gartner Research

 Toolkit: Digital Maturity Assessment for Life and P&C Insurers 3.0
Juergen Weiss (G00342799)
 Call to Action for Insurance CIOs: Digitalization Is Reshaping the
Role of CIOs and IT Departments
Kimberly Harris-Ferrante and De'Onn Griffin (G00356251)
 2018 CIO Agenda: An Insurance Perspective
Kimberly Harris-Ferrante (G00347241)
 Toolkit: Strategic Technology Map for Digital Insurance 2.0
Sham Gill and Juergen Weiss (G00345499)

For information, please contact your Gartner representative.

27 © 2018 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. and its affiliates.