Emerging technologies are bursting into the market and generating disruption and change. Who would have guessed that we’d be discussing drones and driverless cars as realities in 2015? And in the same time frame, the wide acceptance of maturing technologies such as mobile and cloud? But do they represent a challenge or an opportunity? Depending on your paradigm, these advancing technologies can be viewed as either. Those that embrace the opportunity view see the possibilities for envisioning and creating new prospects for the future. Those who see them as a challenge often seek to control their use, impact, or outcome. But trying to control the exploding experimentation, adoption, and use of emerging technologies is like trying to put a genie back into a bottle!
Unfortunately, it is difficult for many in our industry to take the opportunity view. Relatively narrow thinking has come to light in the discussions at a number of recent insurance industry events where sessions and panels of experts have discussed emerging technologies like drones, the Internet of Things (IoT), driverless cars, 3-D printing, wearables, and others. Some of the discussions have drifted to a focus on how to control and limit the use of these technologies in an effort to limit liability and exposure logical thinking for an industry like ours, given its roots and traditions. But we should be embracing these technologies! They offer profound promise and advantages! We should be talking about how to proactively manage any risks involved and how to create new insurance coverages and products to help our customers manage the risk. Granted, this requires a paradigm shift for our industry especially for an industry that has long been influenced by lawyers, actuaries, risk officers, and others.
We are now entrenched in a digital revolution that is powered by these maturing and emerging technologies. This revolution is driving transformation across the insurance industry, impacting every internal process and every external interaction. The adoption and deployment of maturing and emerging technologies is fueling this revolution, and insurance as an industry has little control over it. But attempts to control the use of these technologies by putting exclusions in existing policies, failing to offer new solutions, or denying claims will only provide the incentive for customers to seek alternative options and encourage new competitors to develop novel solutions that will spur further disintermediation and disruption. We have seen this control approach used by many insurers in the adoption of shared economy models like Uber, Airbnb, and Lyft. These shared models are leveraging emerging technologies. Insurers need to wake up to the very real risk in ignoring or isolating technology-based innovations and the potentially devastating impact over time on client experience, loyalty, and retention, as well as brand reputation and future growth.
The good news is that many insurers are in the process of or have already implemented modern core solutions. This is great, because this modernization lays a transformational foundation for capitalizing on the possibilities afforded by emerging technologies. These insurers are in a much better position to reimagine their businesses to reinvent their interactions with partners and customers, the products and services they offer, and the infrastructure they use to effectively operate the business. They are equipped to redefine their business and revenue models to enable them to become a Next-Gen Insurer.
As John F. Kennedy famously said, “Change is the law of life. And those who look only to the past or the present are certain to miss the future.” Don’t miss out on the exciting future that is unfolding before our eyes. Make way for the paradigm shift. Embrace the promising opportunities to create a prosperous future.
This blog entry has been republished with permission.
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