As has been our wont since this blog began, we take a stab at predicting trends and directions for insurance and technology in Canada at the beginning of each year. We also commit to give an honest appraisal at year-end, and ask for your comment.
It’s time for the reckoning. For 2014, we highlighted specific areas and an overarching trend. We’re going to grade ourselves, and we’d welcome your comments (good, bad, ugly) as well.
Trend: Core Systems Replacements Continue, But with Fiscal Discipline
We suggested that core systems replacements would continue, but that there would be increased governance, focused on cost containment and benefits realization. We think we got this one right.
There were a number of announcements of core systems replacement projects starting and completing. In the vast majority, there was reference to quantified business cases.
At the 2014 Insurance-Canada.ca Technology Conference, suppliers and practitioners focused on the business case elements during the selection and implementation phases. In addition, representatives The Cooperators stressed the importance of keeping up with vendor supplied enhancements and upgrades to continue to realize benefits.
We missed alternatives to full systems replacements, including modernization of existing technology. Guest blogger Peter Symons, from Mariner Innovations, got positive response to his posts on modernization.
Trend: Clouds Start to Cover the Insurance Landscape
If anything, we underestimated the movement to the cloud.
Back in March, we quoted Kathy Burger, Editorial Director of Insurance & Technology on potential for cloud computing in insurance: “Resources can be deployed more readily to where there’s a high-priority need, whether it’s responding to a natural catastrophe, entering a new market, supporting the annual report process, or developing mobile apps.”
And insurers are responding. One big driver is to facilitate customer engagement. In August,we reviewed the resurgence of Customer Relationship Management (CRM) as a core technology. The vast majority of new CRM technology now relies on cloud implementation.
Trend:Telematics/UBI and Analytics: Marketing Becomes the Designated Driver
We felt that Marketers would take control over the direction of Telematics/UBI in Canada during 2014. We think that’s correct, but there are a lot of open questions. We’ll take a 75% on this.
At the 2014 Insurance-Canada.ca Technology Conference, Michel Laurin, President of Industrial Alliance Auto and Home Insurance, Inc. discussed the use of telematics to facilitate targeted marketing which supported business transformation in his organization.
Throughout the year, we saw some progress with implementation. However, a number of insurers are still considering options. Moreover, the launch of a broker owned consumer facility by IBRI (a subsidiary of the Insurance Brokers Association of Ontario) is still pending.
Overarching: The Internet of Things (IoT) as a Super-Trend
At the beginning of 2014 we felt there might be some limited interest in a super-geeky topics – The Internet of Things (IoT). By mid year, we recognized we had underestimated this as well.
There has been a rapid rise in consciousness of the technology and the possible impact on business generally and insurance specifically.
The IoT is simple to describe: Machines communicating with other machines using the same Internet protocols we use to access data and applications throughout cyberspace. Assuming the machines are correctly configured, there are endless possibilities to automate workflow and reduce friction.
There are numerous opportunities in insurance, including business transformation. At our October Executive Forum, Donald Light from Celent presented on the Internet of Things as a key element in business transformation.
We are feeling that the IoT could be a focal point for deployment of a wide range of services to insurance organizations and their customers.
And We Missed One Big Thing …
Cyberrisk. Well, we didn’t miss it. We just assumed this was an infrastructure issue and was in good hands. We think we were in good company with others on this omission.
Then we started to see the breaches and impacts. Then there was Sony. Bottom line is that Cyberrisk is a serious operational issue for all insurance practitioners and leadership has to be given from the executive suite.
At the same time, it is a business opportunity for practitioners to develop risk management and insurance solutions (see our post on Broker Opportunities, e.g.). You will see lots more on this coming up.
What do you think?
Overall, we think we hit a few, and missed a few others. We’d appreciate your comments. Don’t be shy… we have pretty thick skin.
Editor’s Note: This will be the last post for 2014. We thank you for your active interest in this column. We hope you’ll come back and see us in 2015. Meanwhile, we wish you all the best for the holidays and for 2015.