A new report published by insurance research and advisory firm Novarica has found that treating technology as a risk stifles innovation and investment at the board level.
The report claims that while technology is transforming the insurance industry, most boards of directors still treat technology as if it were a risk rather than a potential competitive advantage.
“Few insurers have any technology expertise on their boards of directors at all, and even fewer have a formal committee to oversee technology strategy and investments,” said Frank Petersmark, AVP of research and consulting at Novarica, and co-author of the report.
The report, which incorporates feedback from a broad range of insurers across life and property/casualty lines, revealed a number of findings. Such as:
While 82% of CIOs regularly attend board meetings, most said their contributions were limited to status updates
89% said their board members didn’t know what questions to ask
Only one said they had a board-level committee focused on technology
“Without an understanding of the opportunities that technology presents, boards tend to focus on what they do understand – risk and cost,” said co-author Matthew Josefowicz, president and CEO of Novarica. “This may be leading insurers to underinvest in transforming their technology-enabled capabilities.”