P&C Insurers Maintain Digital Momentum in 2H 2021

Mark Breading is a Partner at ReSource Pro Consulting.


The past 18 months have been interesting, to say the least, for anyone involved in technology strategy, planning, or implementation. Ideally, a roadmap with prioritized projects and defined resource allocations directs the activity, and the company stays relatively true to its path.

Unfortunately, the pandemic has wreaked havoc on tech plans. Project priorities have often shifted, sometimes virtually overnight. Digital gaps have been exposed. Customer expectations have dramatically changed. And executives wonder what the new normal will look like.

SMA has conducted a series of market pulse polls throughout the pandemic, starting in April 2020, as the initial economic lockdowns and work-from-home mandates began to take hold. Our latest survey, conducted in May of this year, is aimed at assessing how plans are changing and being reshaped as personal and commercial lines insurers move forward in the second half of 2021 and formulate plans for early 2022.

Whether we are moving toward a post-pandemic era in the U.S. is debatable, but what seems clear is that tech-related plans are moving ahead full steam. So, what does the big picture look like?


The commercial lines insurance industry has gone through three distinct phases over the last year and a half. In the early days of the pandemic, there was a tactical response to the lockdowns, which affected employees, customers, and partners alike. New virtual, digital capabilities also became a priority to enable remote work and remote customer interactions.

As 2020 proceeded, phase two began. It became evident that the pandemic would continue for some time, and there was a deceleration of some activities, a pause in projects, and some of the more innovative initiatives were tabled until 2021.

The third phase began in 2021 with an explosion of activity. Commercial lines companies began accelerating plans, launching a frenzy of tech-based strategy and implementation activity in the first half of the year.


Our most recent market pulse survey shows that hardly any companies plan to retrench or pause project activity in the second half. There is a significant amount of rethinking for roadmaps and project reprioritizations. But it should be noted that one exception to the reshuffling of priorities is in the core systems space. Any companies that had policy, billing, or claims systems modernization projects in flight have continued to push forward. These projects are so foundational and have so much urgency and momentum that it would be unwise to pause or reprioritize them.

So, the stage is set to be very active for the rest of the year as companies double down on technology initiatives. Although 2022 plans have not come into sharp focus just yet, strategy and budget planning are underway at many companies. This early glimpse indicates that this accelerated digital transformation will not be just a one-year phenomenon, but may just represent the new normal. I personally can’t wait until 2022 to see what is in store for the industry.


Among personal lines carriers, we observed that after the initial tactical responses in the early stages of the pandemic, there was a great deal of rethinking, reprioritization, and new activity related to technology plans.

The initial wave in the spring of 2020 focused on enabling a remote workforce and providing critical digital capabilities to agents and policyholders, not to mention the significant rebates provided to policyholders. But when fall arrived, the technology roadmap became the subject of major review.

Many carriers stayed the course, continuing some of the shifts they initiated in the second quarter. However, some also stopped or paused projects (about one in eight insurers), and some of the more innovation-related activities were pushed out to 2022. But gaps were exposed in areas like first-notice-of-loss and payments, and the need to make these areas digital pushed them to the top of the list. Personal lines companies have been busily implementing or enhancing these capabilities, as well as general self-service capabilities.


Fast forward to the middle of 2021. What are insurers planning for the second half and into 2022? Our survey shows that virtually no personal lines insurance companies plan to retrench or pause project activity. There is a significant amount of rethinking for roadmaps and project reprioritizations, with almost 60% still saying they are reshaping or accelerating plans.

This flurry of activity signals an acceleration in digital transformation, and it is also a signal that the next couple of years are likely to see a further leap forward in the industry’s overall transformation. So, fasten your seatbelts and get ready for the road ahead.

Looking for guidance on digital transformation? Visit our Carrier Consulting page to learn more.