Less than a month ago, research and consulting firm Celent authored a report on emerging technologies in the P&C sector by charting the adoption rates of various technologies. Among the inner-circle were ubiquitous technologies – portal, fraud scoring, predictive analytics – but lining the outer-circle of technologies with low adoption rates were a spattering of slightly controversial, misunderstood technologies and others which possess potential has only begun to percolate in the industry.
In Boston, yesterday, Celent Senior Analyst Mike Fitzgerald clarified exactly which technologies currently carrying low-implementation rates insurers should be placing bets on for the future. Fitzgerald defined these technologies as disruptive, which is a term Celent has been championing recently, presented them as a necessary means of keeping pace in the industry.
“The reason we think this has particular importance right now is customers are demanding and expecting from insurance, what they receive in so many other areas of their commerce,” says Fitzgerald. “So all of the e-enabled purchases, payments, customer service that people have come to expect when buying airline tickets or downloading music has come into the insurance space. And those insurers who are able to pick up and change their business models with technology are beginning to have a significant advantage over those who are not.”
To combine the ideas of disruption and emerging technologies, a chart plotted technologies ranging from the status quo to the innovative to the disruptive. Fitzgerald took time to point out worthwhile, necessary improvements and innovations, such as product configuration and direct-to-consumer portals, respectively, but stressed the game-changing possibilities of disruptive technologies such as mobile web, MDM and, specifically, telematics.
“When you look at the automobile industry, specifically, the risk process for automobile insurance has historically been backward looking. What telematics can do is provide real-time risk information, so you can know not just how someone has driven in the past, but how they’re actually driving now. And that gives the whole risk analysis and risk mitigation in auto insurance a chance to completely disrupt it, where you’re actually gauging, and maybe even pricing, auto insurance in real-time.”
A mixture of technologies that improve, innovate and disrupt your business processes is the best way to ensure a competitive position in the market, according to Fitzgerald. However, achieving this is still well-understood to be easier said than done.
Celent’s research has made clear that insurance executives understand the benefits of such disruption, but it also makes clear that they do not know how to achieve disruption. To make this happen, Fitzgerald stresses leadership from the top, but also acknowledges the need for new skills and behaviors to execute as well as the checking of adoption rates with business strategy. In short, a change is culture may be needed, but it’s a change that will prepare a company for the market of the future.
“We want to put it in a context of not just making things better, not the efficiency play. But absolutely disrupting and finding new ways to do business, because that, we believe, is where the true battleground lies next in insurance technology.
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