Key Takeaways from the Gartner Insurance CIO Priorities 2024: Insights for Technology and Service Providers' Product Plans Report

By Eileen Potter, VP of Insurance Marketing at Smart Communications 

As the insurance industry evolves, technology will continue to play a pivotal role in shaping the strategies and priorities of Chief Information Officers (CIOs). The 2024 Gartner® Report, "Insurance CIO Priorities 2024: Insights for Technology and Service Providers' Product Plans," published on January 2, 2024, by analyst James Ingham, shared that “Insurance CIOs continue to invest in technology to grow revenue and increase operational efficiency, which helps them deal with volatility in their operating environment. Product leaders must factor CIO investment priorities into their insurance go-to-market strategy.”  

To better understand the insights made available in the report, and for further guidance into the challenges and opportunities that CIOs in the insurance sector face, let’s dive into part one of a two-part blog series. 

Three Core Challenges: Where Insurance CIOs are Focusing their Energy

Three major themes emerge as challenges facing insurance CIOs in 2024. 

1. Delivering Business Value without Increased Resources

The competitive insurance market means that CIOs are under increasing pressure to demonstrate the tangible ROI of technology investments.   

As the report notes, “Insurance CIOs continue to support their enterprise in navigating various disruptions to their operating environment, but uncertainty and volatility means they face flat IT budgets, which may struggle against rising costs and inflation. The 2024 Gartner CIO and Technology Executive Survey shows that generating revenue is coming back into focus as the most common top-ranked objective of digital technology investments.”  

2. Embracing the Digital Ecosystem

According to the report, “By 2025, insurance CIOs expect to increase digital revenue and increase the number of optimized processes by around 30%, on average, and this will require investing in a range of foundational and emerging technologies.” 

3. Balancing Innovation with Operational Agility

As traditional business models are being challenged by insurtech startups and changing consumer behaviors, insurance companies must adapt to stay relevant. 

Insurance CIOs must foster a culture of innovation and agility within their organizations to respond effectively to market dynamics." 

One of the primary goals for CIOs is to leverage technology to create a seamless, omnichannel experience for customers. From online policy purchasing to digital claims processing, insurance companies are investing heavily in technologies that enhance user experiences and streamline interactions. The emphasis is not only on meeting customer expectations but exceeding them in an era where digital-first approaches define market leaders. 

Digital Transformation Efforts That Deliver Big Benefits for Your Insurance Organization

Unsurprisingly, digital transformation continues to be a focal point for insurance CIOs. 

As stated by Gartner, "Digital transformation remains a top priority for insurance CIOs as they seek to enhance customer experience and drive operational efficiency."  

This emphasis on digital transformation underscores the industry's recognition of the need to adapt to changing consumer preferences and technological advancements, including focusing on:  

Legacy System Modernization

Many insurance companies are burdened with legacy systems that impede agility and hinder innovation, but it is important to frame these projects as more than just a technological overhaul – but a strategic move towards future-proofing the business and ensuring long-term sustainability. Insurers should not only consider migration from legacy core systems, but look at the enterprise holistically, focusing on how consolidating multiple systems can enable you to create a more efficient technology ecosystem that reduces costs over time.  

Cloud Adoption

The cloud has emerged as a game-changer in the insurance sector, providing scalability, flexibility, and cost-effectiveness. Organizations that have accelerated their cloud adoption strategies are seeing the benefits and how cloud technologies drive efficiency and enhance the overall responsiveness of their organizations.  

Cybersecurity and Data Privacy Improvements

However, alongside the opportunities presented by digitalization, insurance CIOs also face significant challenges. With the increasing digitalization of processes and the growing threat landscape, protecting sensitive data has become paramount for insurance companies.  

Data privacy regulations, such as GDPR and CCPA, are adding an extra layer of complexity to the insurance landscape. Organizations must balance compliance with these regulations while also establishing robust frameworks for data governance, especially when leveraging customer data for personalization.