It used to be common to say that “technology is marching forward, improving business and society.” But today, it would be more accurate to say that technology is sprinting forward – with progress at breakneck speed and breakthroughs happening in multiple fields on a regular basis. There are so many technologies – some new, some just emerging – that it is virtually impossible to track the progress of all of them, let alone explore all their implications.
This may put insurers in an uncomfortable position. Insurance is an industry based on historical data and long-term predictions. However, technologies are now inundating the world with real-time data and a change-pace so accelerated that it is difficult to make predictions. Fortunately, SMA’s new research report, "
To paraphrase George Orwell’s quote from “Animal Farm,” “all technologies are equal, but some technologies are more equal than others.” Every technology has a role to play in the business and personal spheres. Mature technologies such as the telephone and email still matter. More recent technologies like mobile and social media have become mandatory, foundational technologies and have been instrumental in transforming the world. Emerging technologies such as autonomous vehicles, the Internet of Things (IoT), wearables, and many others are poised to anchor the next wave of global transformation – affecting the way we live, work, and play.
It is these emerging technologies that require the rapt attention from insurers now. The earlier technologies are still very important, but insurers have already built those into their business and have had lots of experience with them. But the emerging technologies now have more potential to fundamentally change the insurance industry than anything else at any other time in history. The risk landscape will change. Many new options are becoming available that will change internal operations. Customer expectations are changing, and new customer segments are coming into view.
Some of the mega-trends that insurers should be actively monitoring and considering in terms of strategy implications are as follows:
- 5G and AI Form the Foundation: 5G communications networks and artificial intelligence will form the key foundations for the digital connected world in the next decade. We will need to move lots of data very fast and automate the analysis and actions surrounding that data.
- User Interfaces Are Revolutionized: We are witnessing a dramatic expansion of how we interact with computers and the world around us in new and more natural ways. These new UI technologies affect both emerging technologies and incumbent technologies. The technologies are now rapidly maturing to mimic and capitalize on all of our senses as well as the movements of our bodies.
- Mobility is Hot: Autonomous vehicles are enjoying a great deal of press these days. But this is only one aspect of a complex picture of the evolution of mobility. The notion of mobility encompasses many new, innovative technologies and approaches to moving people and goods from place to place.
These are just a few of the mega-trends that are important for insurance. Expect these and others to be dominant themes over the next few years. Taken as a whole, the change wrought by emerging technologies is likely to rock the insurance industry for the next decade. That said, insurance is still insurance, and the industry has many strengths to build upon. The great challenge (and opportunity) for senior management teams is to double down on traditional insurance strengths while building a highly adaptive organization to respond to changes and prosper in the new era.
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