In a new report, Celent, a Boston-based research and consulting firm, predicts how new technologies are impacting the future of the insurance industry.
According to the report, "Three Futures for Technology and Insurance," there are three possible scenarios: utopian vision, nightmare scenario, and probable future.
To construct each of these futures, the report identifies the building blocks of information, other technology and the insurance model. Celent also makes projections about how these components could change and how insurers would react to those changes.
According to Donald Light, senior analyst and author of the report, "Insurers should prepare for the probable future, while seeking out the opportunities implied in the utopian vision and mitigating the risks implied in the nightmare scenario." He added, "Having a single corporate point of view about technology and the future of insurance will establish a common set of assumptions and context for an insurer's operational and strategic plans. Refreshing this point of view every few years will allow senior managers to think creatively about how to win in a world that is certain to change."
In the "Probable Future," there are significant improvements in information technology (better, faster, cheaper) and in other technologies (smarter, stronger, more useful). Insurers that recognize these changes in their business model will succeed; others will struggle.
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