Welcome to 2012. As we move into the new year, we want to highlight some of the trends we see forming the contours of a New Landscape for insurance technology in Canada.
In this post, we will cover these trends. In our next post, we will discuss a mega-trend which encompasses the others and is becoming a critical competitive factor in the New Landscape.
Here are the trends:
Trend: Social Media Becoming Social Business
Insurance organizations are all over the map on the use of social media for business. Some have not started any formal initiatives. For those who have, the most common entry points are sales and marketing. As we noted in November, some of the leaders are having impressive results with lead generation and conversion. Leading organizations are going well beyond this, however.
Underwriters and claims professionals are seeing social media as rich data sources for risk selection and claims adjudication (see our October post on Maturing Uses). As we wrote in June, we think that the social business model is a natural fit for a relationship business such as insurance.
Trend: Increased Penetration of Mobile Technology and Telematics
Computing and data access has taken to the road, figuratively and literally. Tablet and smartphone computing is not yet replacing deployment of laptop computers, however, as we noted in September, the convenience of the mobile devices and the rise of mobile-only applications is accelerating the deployment of mobile computing. Gartner is projecting that “the installed base of devices based on new lightweight mobile operating systems like Apple iOS, Google Android and Microsoft Windows 8 will exceed the total installed base of all PC based systems.”
Mobile technology powers more than smartphones and tablets. In August, we noted that Telematics – technology embedded in vehicles – is driving (pun intended) a movement to Pay-as-you-Drive schemes in many parts of the world; including the USA and Europe, but not including Canada. We see Canadian insurers actively pursuing this in 2012.
Trend: Broker-Carrier Connectivity Debate Increases
ACORD is now 41 years old and CSIO just celebrated its 30th birthday. Unfortunately, implementation of the Standards for Broker-Carrier connectivity has yet to mature. There are signs this may come to a head soon.
We have documented increased activity by agent associations in the US and broker groups in Canada in promoting standards-based connectivity solutions with Carriers. As, or more significantly, individual agents and brokers are putting financial and personnel resources to work to implement standards within their offices and with their supporting carriers.
In the last few months, however, a debate has started with respect to the level of support by brokers and carriers for standards based connectivity versus proprietary methods through carrier portals. Neither carriers nor brokers can support disparate systems indefinitely. We expect to see increased pressure to come to some common agreement in 2012.
Trend: Modern Technology Becomes a Firm Foundation
Numerous surveys and analyst reports have confirmed that carriers are investing heavily to replace legacy systems for policy administration, claims administration, billing, and accounting. We found (see, e.g., our review of a recent IVANS survey) that the primary motivator for these investments is to improve competitiveness to support growth.
Modern Technology is becoming the rule, not the exception. In reviewing applications for the 2012 Insurance-Canada Technology Awards, a juror noted that while core system replacement projects are challenging, having such systems is no longer strategic, but rather has become ‘Table Stakes’ in the game.
In a few days, we will post on a Megatrend which encompasses the above and could be the technology critical success factor for insurers and distributors in 2012.
Hope you come back then. Meantime, we wish you all the best for 2012.