Five key insurance emerging tech insights
Has the explosion of new technologies and the continual media hype caused you to question if these claims are exaggerated or if your peers are actually getting results? Are you thinking of investing in one of these new techniques? Wondering what others in the industry are doing? These were the questions on the minds of the executive attending our recent Executive Roundtable on Emerging Technologies in New York.
Clearly, emerging technologies are a hot topic in the industry. Whether artificial intelligence, computer vision, voice UI, or internet of things, insurers are investing significant efforts into understanding how these technologies may or may not apply to their business.
We spent the day with over 50 execs examining new technologies in areas such as big data, blockchain and chatbots and learning how they are (or are not) driving results. We also explored the challenges and issues carriers face as they look to move on these new areas of potential value.
In addition to Celent analysts, the roundtable featured speakers from the insurer community who discussed industry trends and told their stories and a leading venture capitalist who offered insights on how to vet new technologies.
Celent analysts are in a unique position in the industry to learn from our research, insurers, vendors, and more. These interactions allow us to form informed positions on the current and future state of emerging technologies. We provided the industry insights while the insurers provided their real-life experiences.
What stood out for me during our roundtable discussions was how transparent and open to learning everyone was. It is a pleasure to see senior executives listen so intently to everyone in the room. The conversation never died. The execs brought up problems or questions surrounding a topic, and others chimed in with answers, or, in some cases, shared that they had the same questions. Everyone was there to learn, not to judge or critique.
It’s clear that these execs have kept learning in their executive role in order to continue evolving as a leader. Everyone attending is smart enough to understand that you have to stay ahead of the curve, and one of the best ways to do that is to hear from peers. It’s clear that their goal isn’t to play catch up; but instead, to gain a competitive edge. They are clearly focused not on what they should be doing now, but, rather, what they should be doing next.
We covered five different areas:
- Jonathan Kalman, of Eos Venture Partners, provided a thought-provoking keynote presentation about how he selects the emerging technology solutions that he invests in. He described his approach as “grounded in systems thinking…discovering how different parts interact”. Once he forms a hypothesis from this standpoint, he asks “How can I combine emerging technology with other processes to build business value?” He encouraged insurers to give themselves the space to think differently, to see where things might go. Otherwise, Jonathan warned that we will be hyped to death with the “next new thing”. His focus when evaluating tech is to gauge the ability to create something that has not been created before and adds value to the customer. Given that the average age of a company that goes through an initial public offering is 11 years, there are no overnight successes and that, as difficult as it is, shortcuts are rare. Change comes by insurers, over time, scanning, choosing, experimenting, and implementing a few of the changes that they evaluate. We must be prepared to say “no” 10,000 times!
- The artificial intelligence panel, with Beverly Harris of Texas Mutual and Pete Johnson of MetLife, really highlighted how different companies are at a different place on the continuum for AI and Data Analytics. Whether your company is just starting out or an established veteran, the spirited discussion brought value to all the participants. Of particular note was the interaction on the ethics of AI and how important it was to consider ethics in all areas of data and AI. This discussion resonated so well that Celent will be hosting a follow-up telephone discussion on ethics in the near future.
- The session called Chat Bots and Virtual Assistants (aka Alexa and Her Friends) featured two presentations. One by Celent’s Donald Light was titled “Alexa, a New Intimacy, and Monetization of (a Lot) of Data.” It took a close look at how Alexa is recasting how families spend their time and the implications for insurers. More Celent perspective can be found in a Celent blog: “There’s a New UI in Town . . . The Need for a Voice Strategy” The second presentation was made by Carl Grinstead, Innovation Technology Solution Delivery Manager at American Family Insurance. Carl’s presentation described the genesis of American Family’s chatbot, Abby, how Abby supports American Family’s brand, and the metrics American Family is using to track Abby’s development.
- The theme of the session on blockchain was best illustrated by a slide which showed a picture of an ocean wave cresting and about to break. Blockchain in insurance is moving out of the laboratory and into production. Christopher Lowell of Liberty Mutual and Patrick Schmid of The Institutes provided details on initiatives which have launched or are about to launch. Internal efficiency uses, such as agent current account reconciliation, and external partnership applications, such as apportioning participation in shared risk policies were examples. Christopher also led a discussion about gaining executive buy-in for a technology and process that is so new and potentially so impactful. Patrick explained the objectives of the RiskBlock Alliance which is bringing together insurers in a consortium development model to explore four specific use cases.
- The last session featured Martin Leifker, the Vice President of Digital innovation and Solutions for Texas Mutual Insurance Company who discussed their virtual reality initiative for loss control, as well as other initiatives in process. Interestingly, according to the Jeremiah Bentley, VP of marketing, who was also in attendance, the return on the VR initiative came from the marketing aspects rather than loss reduction.
As my big takeaways, one thing that stood out was that no matter what topic that was discussed, it always came back to data. We talked about how data supported conclusions, how others are using data, where they're getting their data from, and how they've used it to increase their bottom line.
The second thing that struck me was how each the insurers are focused on putting customers first.I was excited to hear that every strategy started with listening. Each company focused on what their customers wanted and needed. The most valuable takeaway I learned from the discussions is that transformation especially at the executive level, is not a guessing game. Getting to the top is hard, but staying there is much harder. Successful executives in this world of transformation play well and learn from others, use data effectively, listen to their customers, and can tie everything back to the bottom line.
This blog has been reprinted with permission from Celent.