Insurance is fast becoming a leader, rather than a follower, when it comes to leveraging 21st-century technology. That’s according to Novarica president and CEO Matthew Josefowicz’s keynote address yesterday at his company’s Impact Awards Summit in New York.
“We’ve been talking about 2015 as the year the future arrived’ to insurance,” Josefowicz told the assembled crowd of insurance technology professionals. “A lot of things that we had been predicting are happening now.”
Those predictions included:
- A consumer internet giant making a move into the insurance industry, which Josefowicz says was borne out by the launch of Google Compare this year
- Wearable technology having a measurable impact on life and health insurance premiums, like the introduction of John Hancock Vitality in April
- Commercial lines insurers taking a close look at the Internet of Things, as Hartford Steam Boiler did in investing in the IoT management startup Waygum
- And increasing sales of small commercial lines policies online Josefowicz pointed to information from Hiscox that such activity is on the rise.
“The surprising news is that insurance has always been an information technology problem, even in the 18th and 19th centuries,” Josefowicz explained. “It’s all about how we move information about prospective risk into an organization where it can be priced and how we have done that has been an artifact of the information technology at the time the processes were designed.”
Now, he continued, stakeholders across the insurance value chain have new expectations. It’s not just that insurers are using new technologies, he explained there’s an increasing amount of focus on the user experience for enterprise users of technology.
“There is a tremendous amount of demand for thinking about tomorrow’s problems while addressing today’s problems,” Josefowicz said. “There’s no use hiring best and brightest if they’re going to sit in front of a green screen from 1985.”
Also trending up is business sponsorship of technology initiatives. In fact, Josefowicz said, insurance business leaders are so excited about technology innovate that if you are spending an outsized amount of time trying to come up with the business case for a project, “move on to something else.”
That’s because the business is so hungry for new projects, he explained, that making the case for a project is easy. In fact, IT leaders don’t have to worry as much about hard ROI when rationalizing an idea.
“It’s the softer communication metrics” that insurers are using to measure success, Josefowicz said, because “the biggest tech problem is not cost remediation.”
“It’s the need to become demand-led,” he explained. “What are customers buying: Coverage at price, or experience of being covered? Does a customer want 400 rate classes or gold, silver, bronze?
“We are selling to our customers as if they were all actuaries. But that’s not what the marketing department is selling,” Josefowicz said. “They’re selling the feeling of security and being covered.”
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