I have been lucky to witness major milestones in the insurance / technology environment over the last 35 years. Last year, I suggested that technology belongs to what I call “previously unthinkable”. This seems to be true, and there are bigger changes yet. Are we ready?
A brief history of disruption …
Borrowing heavily from Thomas Kuhn’s “The Structure of Scientific Revolution” (c 1962), I suggest that, to date, there have been 4 generations of previously unthinkable technology, each of which has had significant alterations to the business of insurance.
In Kuhn’s studies, important changes were not developed with small steps. To the contrary, new organizations and individuals came on the scene with full knowledge that the results could be disruptive. Put another way, Kuhn notes that results of new science are unexpected and “radical new theories have again and again been invented by scientists.”
What have been the steps?
Looking at the history of insurance processing, there have been three disruptive changes in action. There is also one projection that is at hand:
- Mainframe computers(circa 1960s). Originally, mainframes were primarily in the domain of scientists, due to high prices and complex support requirements. For the executives, it was a large risk. Over time, however, larger insurers started implementing the ‘big iron’ (possibly a bit of showing off?) and tech suppliers found methods to scale down the computing platform for mid-sized organizations.
- Desktop Computers(1980). These had two ‘features’: (1) ability to start working with relatively little training, and (2) lower costs for individual use. The downside occurred when most every department could find a use for its worker. The initial cost was one challenge. More significantly, the training and support requirements were high while workers became adjusted to new workflows and data integrity.
- The Commercial Internet (1992). This was so very geeky to begin with. Using URLs was, as a colleague said, ‘gobbly-de-gook’. Internet suppliers ranged from large communications companies to 2GIAGs (two guys in a garage). For the first year, it didn’t matter; email delivery was ‘if’ not ‘when’. However, with investments and rationalizations, the resulting suppliers were able to go well beyond text, pictures and automated seals. For insurers , brokers, and claims managers are using various Internets for public and private use.
- Platforms (2016). A year ago, I suggested we were at the gate of ‘InsurTech’. This was the expansion of fully digital applications, which would allow new methods and systems for development, implementation, and full support for insurance applications. Since then, it seems that it is going on a track that will go well beyond. A number of organizations are bringing in platforms and ecosystems that will land in a completely new environment.
And beyond this?
The keys are attaching to integral functions – including platforms and ecosystems – which could manage Artificial Intelligence (AI) and Blockchain. These will be large, flexible, and powerful. This will allow insurers of all sizes that specific applications to meet the insurers’ objectives.
As or more significantly, this won’t necessarily belong to insurers alone. Agents / Brokers, MGAs, Re-insurers, self-insured’s, etc. may take advantage of the functionalities and connectivity.
Editor’s Note:
#InsurTech02018 will be held on Wednesday, November 7, 2018, at the Toronto Sheraton Centre. This will have insurers, brokers, InsurTech and more in a fast paced day. Details @https://www.insurance-canada.ca/insurtechto-2018/
