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The Future of Insurance: If Not Technology, Then What?

Is the insurance industry really immune from the impact of technology?  Or will the collaborative nature of Web 2.0 and Social Media force a new reality on the community?

Ara Trembly, has been preaching the importance of technology to the insurance community for years.  However, in a recent post, reviewing a report from Deloitte, even he got a bit cynical.  The report,  “Insurance Industry Outlook: High Hurdles Loom in 2011 & Beyond,”  suggests that the current flat economic outlook will be challenging even to the best managed insurers.   The report suggests that insurers determined to survive must take a proactive technology position.  Trembly quotes the report: “Technology appears destined to play a far more prominent role within the insurance industry, beyond data management.  Indeed, the effective implementation of a number of technology tools and strategies might be the differentiator many carriers need to stay ahead of their competitors.”

Trembly takes a step back, however, and writes:  “Yes, we pundits keep warning insurers that they need to do everything faster in order to beat their competitors to the punch on procuring or retaining business. But insurance is not a ‘gotta have it now’ business, and I have yet to see widespread reports of consumers deserting their insurance companies for others who can execute transactions more quickly.”

But perhaps the new technology is, in fact, new.  And perhaps, by  providing a collaborative experience, it is much more integrated into the fabric of commerce and business.  This sounds a bit airy-fairy, but consider how we are changing as consumers, and want to be more active participants in the consuming process.  Instead of insurers being the keepers of all information, the new world of collaboration may allow a more fulsome, and fulfilling experience for buyers and sellers alike.

We are seeing some interesting examples of this starting to emerge, and will comment on them in future posts.  However, no technology is a magic pill.  Organizations need to learn how these will best work for their particular situations.  As usual, the success of a strategy will be dependent on the capabilities, and speed of its execution.

A recent post in IT in Canada, summarizing comments by Andrew McAfee from MIT Sloan School of Management,  said it well:  “Social networking may well encourage anyone and everyone to participate in discussions, meetings and interactions online – but that doesn’t mean everybody will benefit from it. According to (McAfee), companies that fail to embrace the latest collaboration concepts will be left behind.”

 

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