No one would argue that the world is an ever-changing, dynamic environment in which to do business, yet some observers might point out that the conservative nature of the insurance vertical might hamper the industry from taking advantage of coming change.
Not so, notes a new report issued by Strategy Meets Action, a Boston-based advisory firm. The firm released its report, "Insight on the Future of Insurance: Looking at Technology through the Long Lens," as part of the SMA Strategic Insights research series.
The firm identifies information and communication technologies (I&CT) as an advancing trend, which, when combined, create a powerful force for transformation.
The report cites scientific developments in areas such as nanotechnology, biotechnology, robotics, genomics and alternative energy as examples, positing that the potential impact promises to drive staggering change in the world of insurance.
“As I&CT and scientific advances become more sophisticated and pervasive, new risks will arise and new opportunities for products, channels, and business models will unfold,” Deb Smallwood, SMA founder, tells Insurance Networking News.
Using a 10-year time horizon, the report takes a visionary look at how advances in I&CT will alter the landscape, and describes key implications for the global insurance industry.
Using five major I&CT trends, the report describes four profound business shifts (see chart), and identifies five new areas of opportunities for insurers. For example, massive amounts of information, including intelligence embedded in more and more things, will spur a shift in business strategic focus beyond automation to insight—insight that will make it possible to instantly negotiate and offer variable product provisions that contain dynamic pricing options.
“New opportunities for insurers will result from the introduction of new types of risk and new ways to package, deliver, sell, and service insurance, as well as new ways to price and manage risk,” notes Smallwood.
Insurers that are proactively thinking about the implications of these changes, and developing scenarios for the future world of insurance will be better positioned to capitalize on new opportunities, points out Mark Breading, SMA partner and author of the report.
"Although it is not possible to predict exactly what the world will be like in 2020, it is possible to create a nimble organization with fully coordinated people, process, data and technology—an organization that is able to adapt and thrive in the future," he says.
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