Technology Leadership Insights: Deep Insurance

Historically viewed as an outsourced cost and facility center, the company’s technological capabilities are increasingly viewed by insurance business leaders as key enablers of business strategy, essential to rapid expansion, unlocking new revenue streams, and eliminating inefficiency and labor In an increasingly complex regulatory environment.

There is an urgent need for companies to reposition technology along with other strategic functions to bring fresh thinking into how they organize and drive their technology capabilities. To do this successfully, companies will require exceptional talent.

We analyzed the state of technology leadership across the UK insurance sector from the perspectives of executive positions, gender equity, tenure, and the technology leadership pathway. Our research included the chief information officer and chief technology officer of more than 50 insurance companies spanning the life, general, wholesale, and broker sectors.

Main findings

positioning

35% of the companies in our sample have appointed technology leaders to the executive committee, which is evidence that leaders are increasingly recognizing the importance of technology along with other strategic functions.

gender equality

Women remain significantly underrepresented in senior technology leadership positions across the industry. Only 15% of the tech leaders in our sample group are women.

a period

We’ve seen a healthy rotation of leadership positions in technology. The average tenure of technology leaders was just over three years.

driving path

We noted that 54% of the hires were from within the insurance sector and that 21% overall represented internal promotions.

Anecdotally, we’ve seen an increase in technology leaders transitioning into broader operational leadership roles.

Priorities for 2023

Recurring themes from technology leaders

• Extend data and digital capabilities to proposed business products and services.
• Accelerate the transition of core processing to the cloud, enabled by the upcoming release of next-generation platforms.
• Accelerate migration to new platforms through rapid modular development on a product-by-product basis.
• Create operational simplification by aligning business architecture and technology.
• Increase the ease of doing business with an expanded partner ecosystem, focused on simplification and accessibility at the orchestration layer.

Implications for technology operating models, culture, and leadership

• Provide technology leaders with leadership opportunities across the business to gain the business and operational experience required to contribute most effectively as part of the Executive Committee.
• Shift the mindset of technologists and the broader business to agile, iterative design and rapid deployment, which often conflict with a culture of risk management.
• Reinvest in strategic internal technology capabilities (such as data, engineering, and security) while accelerating the transfer of core IT capabilities to third parties.

positioning

35% of the companies in our sample set have appointed technology leaders to the executive committee. We note that mutual insurers have the highest proportion of technology leaders on the executive committee at 57%. Private equity-backed companies scored the lowest, at 25%.

We noticed a large disparity between sectors. In general insurance, 52% of companies had a technology leader as a member of the executive committee, and in life insurers this percentage rises to 67%. In contrast, there were no technical leaders on executive committees in our sample of brokers.

Ramifications

Insurers are increasingly recognizing the importance of technology in shaping and delivering business strategy along with other strategic functions. They are looking for technology leaders to contribute across the business.

The Leadership Challenge: What are the opportunities to expose emerging technology leaders to broader commercial and operational leadership?

gender equality

Only 15% of the tech leaders in our sample group are women. This dropped further to 10% when looking at life insurance companies in isolation. In 2022, 20% of appointments will be female.

The highest proportion of women technology leaders is recorded in mutual insurance companies at 33%, followed by private equity backed companies where 11% of technology leaders are female. Limited corporate structures account for the bottom 10%.

Ramifications

Women leaders remain significantly underrepresented in senior technology leadership positions across the industry. This represents a missed opportunity to tap high-performing talent and create role models to inspire the next generation of female tech leaders.

The Leadership Challenge: What obstacles, real and perceived, can insurance leaders remove in order to promote and appoint women to senior leadership positions in technology?

a period

The average tenure of technology leaders is 3.3 years. We observed a healthy rotation in technology leadership positions with 25% of the technology leaders in our sample set to be hired in 2022.

Ramifications

New thinking and new ways of working are increasingly being appreciated by leading organisations, highlighting the importance of continuous succession planning.

The Leadership Challenge: Where can a more strategic and commercially astute technology leader help unlock additional value and reposition technology as a strategic driver of business performance?

driving path

54% of the hires were from within the insurance sector and 21% represented internal promotions. Technology leaders from the broader financial services sectors are the next most popular background, followed by professional services.

Ramifications

There is a missed opportunity to leverage the experience of technology leaders from other sectors, many of whom have already gone through significant disruption, as sources of innovation and market differentiation.

Leadership Challenge: What assumptions and beliefs can be challenged regarding the experience and background required of technology leaders to be influential in the insurance industry?

methodology

This report is based on a sample of 51 insurance companies covering the life, general, wholesale, and brokerage sectors, with a total of 60+ CIOs and CTOs. The following data sources were used in the development of this report: Teneo CEO and Investor Outlook Survey 2023, BoardEx, LinkedIn, and individual company websites.