Editor's Note: Petersmark served on the advisory board of INN's Dig|In conference. Following are his takeaways.
At the recent Digital Insurance Conference in Austin, I had the opportunity to moderate two panels that highlighted the very different perspectives on disruption that digitalization is having on different segments of the industry.
Knowing is only half the battle
The first panel was with a sitting CIO and a former CIO in the P&C industry, and their collective perspectives can best be characterized as those of the disruptees, as compared to the disruptors. I spoke to many carrier people at the conference, and almost all of them acknowledged the new reality of the macro trends that are impacting the industry, most particularly the digitalization of the insurance industry. That’s the easy part. As the CIO panelists pointed out, however, it’s one thing to acknowledge and recognize the pressures coming from digitalization – particularly as it relates to customer centricity – and quite another thing to have the wherewithal to actually do something about it.
The past is not dead. In fact, it’s not even past
The CIOs on the panel were both from midsize insurers, and they correctly pointed out that it’s difficult to make progress on any one of these macro trends, let alone all of them, given the realities of budget constraints, ongoing core systems transformations, the constant shift of priorities, and the difficulty in acquiring and retaining the kind of IT talent that can push this rock forward. Those are real problems, and based on the panel and the many conversation I had with carrier people, that won’t be solved anytime soon.
On the other hand, the second panel I moderated featured three disruptors who in their own ways were reimagining how the insurance industry should work.
The first panelist had started a customer focused data aggregation service that allows small business owners to get insurance with just a few clicks – a clear threat to existing agent distribution channels in small commercial. The second panelist started a service that while not completely disruptive to the industry, it nonetheless uses intelligent data to quickly compare policy contract contents and highlight the difference, a laborious mostly manual process for the industry. The third panelist has placed themselves squarely between the consumer and the carrier, by creating a smart, wifi-enabled nine volt battery for home smoke detectors that has the potential to contribute to the smart home assault on home insurance premiums. Each one of them viewed the insurance industry as an easy target for disruption, given its poor track record with customer experience and process transparency.
Lack of resources for innovation
That was the general theme from nearly all of the disruptors attending the conference. Many of them had the kinds of ideas and solutions that might play well in other verticals, but the disruption barrier to entry is so low for the insurance vertical, they’ve chosen to go there first. Unless you’re a Fortune 50 insurer, it’s becoming increasingly clear that much of the digital transformations entering the industry are and will be from outside the industry, leaving the industry in more if a reactive mode for the foreseeable future.
Who watches the future?
One way for insurers to get ahead of this is to continue to advocate for the strategic imperative of technology and its effective use at the executive and board levels. One way that midsize insurers can accomplish this is by appointing technology experienced board members, and by considering the establishments of board level technology committees as way to place the competitive and market implications of a well-executed technology strategy in their proper place – at the strategic top of the company. We’ll be presenting our research on this topic at the NAMIC Annual Convention on September 25-28, 2016 in Vancouver, BC, Canada. These are the kinds of actions that might help many carriers change their digital disruption orientation from reactive to proactive.
This blog entry has been reprinted with permission from Novarica.
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The opinions posted in this blog do not necessarily reflect those of Insurance Networking News or SourceMedia.
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