In addition to discussing current issues, participants at the ACORD Implementation Forum in Fort Lauderdale, including insurers, agents, suppliers, and ACORD staff, are preparing themselves, and the industry organization itself for the year 2020.
A panel, moderated by ‘practical futurist’ Michael Rogers, looked at some of the characteristics of the new world and how organizations could prepare. Gray Nester, MIS Director – BB&T Insurance Services, representing the distributor community, set the stage with a recent experience. He noted that in a recent trip to a pet store, as he was checking out with his dog food, a prompt on the point of sale terminal read “Apply for Pet Insurance? Press 1 for application, 2 for no.” Nester believes that this type of automatic, cross-marketing will become the norm as we move forward.
John DiBuduo, Senior Vice President and CIO, Partner Reinsurance Company, believes that the major driver for insurers and reinsurers to innovate will be the need to seek new revenue sources in an ever increasingly competitive environment. Monique Hesseling, Chief Marketing Officer and Head of Branch Operations for Zurich Global Energy, noted that increasing regulation will also force change in insurance operations.
Ed Skoviak, Architecture Services, Mass Mutual Financial Group, believes that technology will drive product change. In the past, there have been attempts to build new products by combining features from existing products. As technology and data management become more integrated, there will be an opportunity for insurers to link disparate elements that are called up as needed, rather than packaged completely at time of issuance.
Hesseling noted that new data sources would drive the need for some products. As an example, she noted that some organizations are offering ‘reputational insurance’ for people and companies who have concerns about their names and reputations being negatively referenced on social media.
These changes will have profound impacts on technology departments. DiBuduo noted that the rapid changes in technology, and the proliferation of ‘Big Data’ (we posted on Big Data in June) will force insurance IT departments to move away from development and coding, to more integration of package technologies. He noted that the primary strategic skill requirement was for IT to be an effective ‘technology broker’, linking needs to products and services.
Nester noted that technology would also force and allow the distributors’ roles to change. He used a bundled product as an example . Nester said consumers will want a ‘bundle’ of products tailored to their specific needs, which might include home insurance from one carrier, auto insurance from another, and life insurance from yet another. This is traditional for an independent distributor. However, he also noted that the consumer would want convenience that demanded that making application for, or making changes to, or paying for this product would be done with a single transaction, likely taking data from the consumer’s mobile device. This requires close linkage among all of the providers of the underlying products.
Spero Zacharias, Senior Vice President – International Field Operations Services Manager for Chubb, noted that ACORD 2020 is an initiative by ACORD to continue to develop standards, but pay significant attention to the implementation of the standards to meet the needs of insurance practitioners. Zacharias chairs the ACORD 2020 Advisory Committee charged with overseeing this initiative.