1. Advanced Analytics Explosion

The basis for competitive differentiation in insurance is fundamentally changing as insurers take business intelligence and predictive analytics to the next level of sophistication.

Advances in technology are enabling collaboration; real-time action and reaction; event-driven triggers; and self-learning that is delivering value across the entire value chain, and creating insight that would have been beyond our imagination only a few years ago. The capabilities of the technology are here. Implementation is limited merely by the industry's ability to gain experience and deploy.

2. Social Media

No doubt about it, social media is making headlines. Many, at least at the personal level, are participating in it. But it is tough to find an insurer that is using it extensively.

The importance of social media technologies to the insurance industry lies not so much in the technology itself, such as web 2.0 and 3.0, but more in how it is changing behavior patterns for communication — changes that could alter the entire business model for insurance in years to come.

3. Mobile Evolution

The evolution of mobile technologies has nearly become a revolution as the integration of voice and data are changing where, when, and how people communicate.

The new generation of smart phones coupled with the explosion in the use of iPads and other new tablet-type devices are rapidly changing things. The question is not when to invest in this fast-paced technology, but rather how soon can it be done.

Recent SMA Ecosystem Research shows that 15-20 percent of insurers have already made plans to invest in mobile development in 2011.

4. Cloud/SaaS Maturation

The maturation of cloud computing and software-as-a-service (SaaS) is changing the options that are available for the delivery of IT solutions.

Some of the confusion in the marketplace about the differences between hosted solutions, SaaS, ASP (application service provider) model offerings, and cloud computing is caused by vendors that mislabel what they are really offering.

In spite of any deficiency in clarity, the reality is that there are many new options available to reduce costs, reduce risk, and increase both system capacity and capability.

5. Development Revolution

The very nature of what applications are being developed and how they are being developed is changing. For many years now, the IT industry has been talking about systems-oriented architecture (SOA) and the ability to use plug-and-play components.

Indeed, many insurers have made great strides in creating the platform and architecture needed to make this vision a reality. Insurers must take note of the fact that the way customers shop and consume applications for their smart phones and iPads is changing dramatically and rapidly. Plug and play will quickly become the reality for industry.

Technologies will continue to advance over time. The business of insurance will change — in some ways triggered by these advances, in others ways in response to these advances. Now is the time to look up and out. Closely monitor these five next-generation technologies. If you get started now and gain experience with small projects and prototypes, your effort will be rewarded with big dividends in the years to come.

This is an excerpt from SMA's latest research brief, “Next Gen Technology Trends … Important Watch Points for Insurers.” For more information, go to www.strategymeetsaction.com.