BOSTON—Many of the challenges the insurance industry faces as it seeks to meet the market conditions of the future stem from the multiple channels through which it reaches its customers, according to one industry technology expert.

But technology tools that could allow companies to integrate their service delivery capabilities could increase the value insurers provide customers, reduce costs and improve the way insurers do business, said James Bisker, global insurance industry leader in IBM Corp.'s IBM Institute for Business Value in Cambridge, Mass.

Speaking at the Insurance Accounting & Systems Assn. Inc.'s annual conference last month in Boston, Mr. Bisker noted that insurance companies typically have found innovation difficult. "Going forward is very difficult for insurance companies because they have a very big obligation to deliver in the present," he said.

But, citing findings from a recent study by his organization titled "Insurance 2020," Mr. Bisker said, "Optimizing business as usual is not enough to create value in the next 15 years."

"What we're basically saying here is optimization has taken the place of or is a proxy for innovation in the insurance industry," he said. But several "mega-trends" that will affect the industry during the next decade will force insurance companies to innovate "because somebody's going to break from the pack and leverage the value technology provides," Mr. Bisker said.

The four, large-scale mega-trends that will affect the industry going forward, Mr. Bisker said, include active and informed consumers across demographic groups who will reward nontraditional operators, giving business to insurers that consistently meet their expectations.

Also, technology will "virtualize" the value chain and lower barriers to entering the insurance business, permitting the rise of niche service providers and "virtual" companies to meet the needs of consumers and businesses.

The need to deal with customers who thrive on communication and personalization will drive a trend toward more dynamic mainstream insurance products that are flexible and adaptable, with technology allowing insurers to bring that product flexibility nearer to real-time consumer interaction.

Regulatory coordination and broadening industry standards to a global scale will dovetail with increased automation, which requires industry standardization.

The mega-trends will force the industry to innovate, IBM found. Among other conclusions, its study found that "interlopers"-companies from outside the current traditional insurance industry-will increasingly disrupt traditional insurance operations by moving into various areas of the business in the future.

Also, industry leadership will require experimentation in operating models, processes, products and customer relationships, Mr. Bisker said. Strategic investment in business-model innovation today is essential to insurance companies' chances of being successful in 2020, the study found.

For consumers, "trusted convenience" will be the watchword during the next 10 years, Mr. Bisker said, so innovation will be required if insurers are to meet that expectation.

However, old modes of thinking threaten the industry's ability to innovate and the current operational mode of most insurers is deeply rooted in the past, IBM's study found.

While the insurance industry doesn't have a problem with technology, it does have a problem leveraging it to its highest value as well as a problem in letting go of the industry's traditional monolithic value chain, Mr. Bisker said.

As one example where he sees insurers able to benefit by embracing emerging technology, Mr. Bisker cited opportunities in leveraging converged voice/data networks.

Even as online insurance buying increases, he said insurance remains a complex industry requiring a lot of "face-to-face" time.

Today, voice, mobile phone, video, the Web, e-mail and instant messaging all work as communications tools in the insurance selling process. "They just work separately," Mr. Bisker said.

In the future, all of those channels will work together. "The power of having all this converged is much more than simply having one device," Mr. Bisker said. "It's the fact that each of these channels can interact with each other."

That capability has the potential to provide service, convenience and service quality not previously available, Mr. Bisker said.

"Internally it offers many capabilities," he said. "But externally, to clients, it offers that 'trusted convenience.' "