Insurance-Canada.ca - Where Insurance & Technology Meet

InsurTech: Time is of the Essence

Maybe I’m looking with skeptical eyes, but it seems that some insurance organizations are viewing InsurTech more as ‘saying’ than ‘doing.’ While there are new approaches by brokers and insurers, there is not an even approach. I’d be very interested in your thoughts.

Where there’s hope …

In a recent post, Mike Berris, a 25-year insurance CPA, noted that while he had been reading a lot about “InsurTech,” he still wasn’t exactly sure what the term meant. This is not unusual.

However, Berris does understand that “brokers and direct writers have invested millions of dollars trying to develop technology-driven distribution channels with the hope of finding the next great market disruptor” (emphasis supplied).

The term ‘hope’ is interesting. For insurance organizations (carriers, distributors, claims suppliers, etc.), there are a myriad of tools dedicated to serve customers in the ‘new’ world.    These include internal analytics, Blockchain, and 24/7 robotics.  While some organizations have a plan, others rely on good marketing and hope.

The question: Does hope have the capability to generate InsurTech?

InsurTech tools can be very powerful. At the same time, however, InsurTechs can be complex, and small mistakes are expanded if there are no overseers.  For example, at our Insurance-Canada.ca Executive Forum in August, several brokers confessed that ‘chatbots’ were great – until there was a problem on a weekend with no second-level (humans) support to fix a bug and no phones that are answered after hours. This is not the end of the world, but it might be the end of a quote for the frustrated prospect.

In truth, InsurTech carriers and brokers have little interest in hope – especially with those that have continuously maintained current back-end processing systems and customer facing interfaces.  In addition, they are constantly exploring, testing, acquiring, and implementing technologies that support their strategies.

New is good, but only if new is known

The smart insurance professional knows that no one will ever have all the best-in-breed, cutting edge technologies at the same time.  However, they will maintain sufficient budget to allow product and service acquisitions to stay ahead of competitors.  This is critical.

W. Brian Harrigan is the founder and CEO of InsurIQ. In a recent interview with Gerv Tacadena, Harrigan focused on limitations hindering full digitalization. This began well before ‘digitalization’ was a common term.

After his initial career as a managing underwriter, Harrigan focussed on Insurtechs (well before this was a common title). This allowed him to identify challenges with the plethora of product fillings, licensing, and compliance issues.

Rather than changing individual issues, Harrigan approached insurers to take an “all digital” view of the business and to become more consumer-centric.  With this under development, Harrigan encouraged focus on new elements that would “add real value to the reinsurance ecosystem.”

Reaching ‘fully digital,’ somewhat

This now has established methods to help insurers understand a fully digital environment. A major benefit is to work around insurers’ legacy systems, allowing a “speed to market” advantage.

However, there are still challenges.  Medium to smaller insurers have been inundated by an increasing number of technology providers.  Many of these suppliers do not have a clear view of changes in the insurance environment.

Brokers are in a similar conundrum.  There has been consolidation with larger, national enterprises. These are developing new, increasingly digital approaches. However smaller brokers do not have the resources or the time or both to take on new approaches.

This will change, but what’s next?

Technologies will become more standardized and brokers will reach to exploit the new tools and products.  Much of the customer experiences will be the driven by the interest of the customers.

And time will tell. But my bet goes with Tempus Fugit. Specifically, digitalization is defining strategic directions that will guide those who are prepared to complete in the next generation of the previously unthinkable.

Your thoughts?