- Where Insurance & Technology Meet

The 4th Generation of the Previously Unthinkable

Back in the early 1980s, a very wise senior IT manager introduced a group of insurance professionals to the concept of the ‘previously unthinkable’ in regards to technology implementation.  I am not sure how many people caught on to it, but it has served me well.  And, I think, it informs the rise of InsurTech.

Prelude to the ‘Previously Unthinkable’

In 1983, I was a junior member of a team, charged with distributing personal computers and applications to field offices and selected brokers.

We had designed and developed applications that could calculate and print quotations and proposals for life and disability insurance products.  The in-house mainframe was doing this at the time, but the agents and brokers wanted more flexibilty and shorter turn-around time.

Over a 3 month period, a steering committee – comprised of senior executives from  marketing, underwriting, finance, and IT – had guided the project well.  We were down to acquisition of the technology, implementation, and delivery to the field office.

Decision time and “Previously Unthinkable” defined

The steering committee had approved state of the art technologies – IBM XTs  and IBM 3270 PCs.  With modems and printers, each unit rang in at C$10,000+. One of the questions was ‘How many PCs do we put into the offices?’

There was a serious debate.  The more  conservative folks wanted to start with one unit per office.  The more aggressive executives suggested a ratio of 3-4 users per unit.

The IT Manager waited to the end, and raised his hand.  The conversation went like this:

IT Mgr:  “One”

Chair: “One what?”

IT Mgr: “One per employee.”

Long Pause.  Sound of inhaling.

Finance Exec: “You mean one per secretary?”

IT Mgr: “No, one for every staff member.”

Marketing Exec: “Agents?”

IT Mgr: “Yes”

Underwriting Exec: “Clerks?”

IT Mgr: “Yup”

Chair:  “Office Manager? Branch Manager”

IT Mgr: “Yes, yes, and, anyone else, yes.  You may not need these all at first, but you will need them before you know it.  You might as well negotiate as good a price as possible.”

What our IT Manager saw was:  a) reduction in unit costs, and b) powerful, under-utilized resources which could be exploited by a variety of end user needs.

“We are in the second generation of the previously unthinkable,”  the IT Manager continued.   He reminded the group that when commercial mainframe computers were developed (1950), IBM believed that few commercial organizations would have the resources to acquire and run computers in-house, and would look to shared services.  That was the first generation of the previously unthinkable.

The IT manager added that, by 1984, we were seeing the next generation of  the “previously unthinkable.”  Just as mainframe computers managed by the individual enterprise allowed for greater flexibility and productivity (first generation);  personal computers loaded with applications reduced friction costs in presenting results to customers (second generation).

The key was to be open to capabilities and leverage the opportunities.

The commercial internet and the third generation…

In the early 1990s, the commercial internet was brought forward, and created significant changes that were previously unthinkable.  Two examples:

  1. Email.  When we found that we could connect email systems, the ability to decrease turn around drove rapid adoption.  (Interestingly, however, some insurance organizations designated specific users to send and receive internet mail to keep control of what was being sent and to reduce costs.)
  2.  Pages. Companies large and small realized this was great to set up virtual billboards with seeming limitless data which reduced to “Buy Our Stuff”.  That changed when Progressive, Allstate, and a few others moved this to allow quotations for insurance and, in some cases, fulfillment of the end result.

And the Fourth Generation?

This is the exciting part. We are witnessing the previously unthinkable emerging and growing in real time.

We are now seeing the expansion of fully digital applications, accompanied by security and de facto standards, allowing plug and play applications. At the InsurTechTO-17 on 6 November 2017, we saw examples from insurers, brokers, and InsurTechs themselves.

One new key element throughout:  we are going beyond technology; Customer Experience must inform the previously unthinkable.

What do you think?

Are you encountering assumptions about technologies in your organization.  Does this the ‘previously unthinkable’ sneak into assumptions?  I’d be interested in your thoughts.


Editor’s Note:  If you did not attend InsurTechTO-17, or you would just like a reminder of the sessions, is offering on-demand video.  Details can be found at the InsurTechTO On-Demand Video page.