Without a doubt, 2014 will be a pivotal year for the insurance industry – a new future is dawning, reshaped more quickly than expected by powerful influences such as customer expectations, forces from outside the industry, and technology. We will see the acceleration of these influences.
This pace of technology change, challenging decades of business traditions and assumptions, is unprecedented in the history of the insurance industry. The industry’s biggest technology disruptions and changes usually came along every decade or two, from the introduction of mainframe computers in the 1950s and ‘60s, to the personal computer in the ‘80s, to the Internet and e-business in the late ‘90s and early 2000s, and the first iPhone/smartphone in 2007.
Now, changes are coming every month, with new technologies, the mash-up of technologies and new uses for these technologies. There are next-gen technologies such as mobile, cloud, data and analytics, telematics and collaboration tools. There are emerging technologies such as 3D printing, the Internet of Things (billions of devices that talk to each other without human intervention), drones, driverless cars, and wearable devices. The speed of experimentation, innovation and adoption will intensify. Insurance will begin to be redefined and reshaped, from the inside as well as from outside the industry.
As other industries have experienced, from retail to books, music and movies, the insurance industry is finding the very foundations of the business being challenged, requiring new thinking, experimentation, innovation and adoption of the new technologies. To respond to this continual disruption, insurance leaders will create a culture and model around continuing collaboration and ideation that extends outside their organizations. Legacy business assumptions, operations, systems and culture will begin to fall away.
Increasingly, insurers will recognize that tracking and assessing the potential and use of next-gen and emerging technologies (both within and outside the industry) will be paramount to their competitive advantage and long-term survival. But insurers often lack the time, expertise and resources to track details of technology trends, follow outside industry perspectives, find and access research and case studies and stay current on trends outside the U.S. market. Insurers will increasingly look at creating and participating in an ecosystem of outside experts and resources to capture the potential, inspire their leadership and enable their journey of change, transformation and innovation.
The journey toward reinventing insurance has started, whether you are on the road or not. No business, regardless of its size, can go it alone and expect to completely take hold of all the possibilities. It will be interesting to see the innovation ecosystems that emerge to help fully capture the potential, change legacy cultures and enable the ideas and technologies to be put into operation uniquely within each insurance organization.
