Technological advances in the insurance industry are likely to happen faster than expected, according to Allianz Australia CIO Steve Coles.

Information technology must fundamentally change to respond to future challenges, he says.

“I think we are going to see a huge shift towards empowering the increasingly IT-savvy business with tools and frameworks to give them more control,” Mr Coles told a conference in Sydney last week.

Companies need sound “architecture” to deliver sustainable value through IT, he says.

“We chose to take a component-based architectural approach at Allianz and I am very pleased that we did,” he said. “However, it is not something you can migrate to overnight.

“If we are to respond to the future opportunities and business needs in an agile way, we can’t afford to be changing our underlying technology every five minutes.”

Digital innovation is accelerating and systems must be in place to respond to new opportunities, he says.

“I used to be able to predict the next five years reasonably reliably. I now struggle to predict the next five months.”

Mr Coles has also called for more focus on data.

“Data and processes are the backbone of any insurance business. This isn’t new. But I find it scary how little focus there has been as an industry on managing some of our most important assets.

“The people that get this right will succeed.”

He questions whether insurers are ready for security challenges.

“As we digitise and make our information more accessible, the security risks increase. The cybercrime market has already matured to the extent that you can now buy cybercrime-as-a-service.”

Mr Coles expects a major transformation in insurance IT over the next five years, as risks and pace of change increase.