- Where Insurance & Technology Meet

Insurance Technology: A Third of a Century, And Only One Bump

When I started in the insurance industry, circa 1984, I had experience with marketing and technology. I quickly learned that each segment was considered critical, but the relationship between the two was not well understood.

Over the years, issues were addressed and resolved, only to find new expectations and challenges. Now, 35 years on, we still have to ask the question: How wide will technologies go, and do we need controls?

Making showbiz out of what was fun

In the early personal computers (PC) days, technology leaders were quite keen to show that computers could calculate quotes instantly, and have a full proposal out within an hour.  All they had to do was to put the then state-of-the-art personal computer in the branch office.

This wasn’t so easy. Yes, it worked according to specs, and the user had virtually complete control.  But most users had little or no experience with PCs.  And managers had little tolerance with ‘Playing with those toys’ (as one of my enlightened colleagues said regularly). 

Where there’s a will …

The 1990s expanded the use of computers and younger marketers were promoting use of technology with agents, brokers, and consumers.  As usual, younger folks showed up with a rich understanding of PCs and networks of smart machines.

Some of these were in IT, others were in lines of business.  It was very libertarian, so long as there weren’t too many senior managers around. 

But then we hit the pot hole

Around 1997, whispers from the backroom got louder by the day. The mantra chanting was: “Y2K Bug. Y2K Bug”

The old core systems, 30-40 years on, had a deep secret:  There were only 2 digits where a new century wants 4.  Would this work on 12:01 at Y2K?

No one knew what would work and what would not.  The only way to check would be to analyze every bit of running code that had any time points.

It was very manual. And very expensive.  Conservative world-wide estimates were in the hundreds of US$ Billions, 50% of which were spent in the US.

IT departments had to scale back spending in the early part of the 21st century.  New IT projects were put on hold and running projects were cut back.

It didn’t last long

The 1990s saw the introduction of the Internet.  At first, marketing drove functions.  There were some business applications, but much of the early ones weren’t linked in with the back-end systems.

Shortly after the turn of the century, things started to change big time. A company called Guidewire came along in 2001.   Use of internet functionality was baked into the code and allowed add-on modules which provided value added on-line services.

As of today …

With the adoption of Internet tools and greater business and technology sophistication, professionals from IT, marketing, and lines of business, claims, and support are no longer resident in silos.  Personnel need to understand the objectives from their own perspectives and execution strategies.

I tripped across an article in Insurance Business Magazine recently, and got to know Dogan Kaleli, Global Corporate & Specialty head of programs in North America, at Allianz.  Dogan’s background is Actuarial and Risk Management, but his functional work is much wider.  He puts it this way:

I work with leaders in all lines of business as well as underwriters, sales teams, claims departments, and many other groups to identify, manage and grow the programs book in North America.

Kaleli manages program business, driven by MGAs and MGUs.  According to Kaleli,the result supports the objectives:  “The Group’s most recent Programs Business Study states that Programs Business grew at a 5.3% clip compared to 1.3% growth for other lines.”

Kaleli is following insurance startups, what he refers to as ‘InsurTech Companies’. And the results?

InsurTech is a game changer and MGAs are uniquely positioned to benefit from digital disruptions … Speed and agility are cornerstones for InsurTech-savvy MGAs. Traditional insurance carrier can take 1-2 years to get new products to market, while MGAs can develop and launch new programs within 2-3 months.

So where to?

We have come a long way, and the future looks interesting. One expectation is that we will likely be relinquishing some control in exchange for massive changes in function.

Are we ready?


Editor’s Note: Insurance-Canada will be presenting the 2019 Insurance-Canada Technology Conference #ICTC2019: A New Insurance Order on 26-27 February 2019. Topics include:

  • InsurTech Startup
  • Bringing Innovation to Claims
  • Millennials and Technology
  • From UBI to Flying Cars: Mobility and Insurance
  • Three Biggest Innovation Challenges for Insurance
  • Insurance Product Development: Managing Obsolescence
  • The Path to 2020: Digital Marketing in the Insurance Industry

                        And More!