After 5 years, ‘InsurTech’ still captivates insurance and technology. Nary a day passes without multiple media descriptions of the latest tools and techniques, making yesterday’s nirvana irrelevant.
Don’t get me wrong. I am quite keen on new approaches, methods and systems. Where it goes south for me is rejection of other systems that have served existing products and services well.
Here are two recent perspectives that show the range of interest for InsurTech, and a view beyond.
In December 2018, Majesco – a technology supplier to insurers and brokers – published a white paper entitled “InsurTech: Energizing the Shift to Digital Insurance 2.0.” The Executive Summary makes this point:
“In this report you will find insights into both why your company’s future depends on innovating your business model, processes, products and services, and how you can accomplish this. The key is under- standing the experiences, viewpoints, priorities, successes and failures of InsurTech Innovators up to this point.”
And it encourages executives and staff to spread the word:
“Take the insights from this report back into your Executive staff, strategy, innovation, product and partnering teams. Ask them to discuss the impacts on the industry and their own plans for the next 12-18 months, and how this will impact your ability to remain competitive 18-24 months out.”
There is absolutely no issue with the material in and of itself. However, I finished reading with two impressions:
- ‘InsurTech’ is not well defined; it seems to morph depending on context, and,
- Relationships among insurers / intermediaries / and customers will be defined in specific context, which may or may not yield benefits from InsurTech.
The Majesco white paper starts with the assumption that “Senior leaders – whether they are incumbent insurers or brokers, or InsurTechs – need to have a comprehensive vision for how the industry is being reshaped by emerging technology and trends.”
This aligns with an assumption that “the insurance Industry is late to its date with the predicted disintermediation and disruption that was predicted 15-20 years ago with the emergence of the Internet and eBusiness.”
This seems to be a very general description. There have been changes in technology and business. The insurance industry is both big and wide, diluting the value of catch phrases
It is true that underwriters and distributors have been behind the times with technology. However, current executives and staff have much greater understanding of data and analytics. And the senior executives are driving usage.
This does not have to be forced. It is already underway.
What Does SMA Say?
Shortly after reading the Majesco White Paper, I came across Deb Smallwood’s post: Is the InsurTech Wave Hitting a Riptide? Deb is the leader of SMA – Strategy Meets Action– a consulting firm focusing on insurance.
Smallwood sees some similarity with Majesco, but not in a final position. She writes: “insurers have collectively started to sort through the flood of information for the best possibilities and select the most promising solutions.”
There are some winners in the InsurTech market, according to Smallwood. However “the rest – the vast majority – are not making it.”
There will be continued progress in the InsurTech community, However Smallwood notes that “not all haveinsurance implications.” She continues:
“Insurance may be the wrong industry to champion them. For many of the technology startups trying to break into insurance, it will be easier to fine-tune their applications and solutions for car manufacturers, utility companies, appliance manufacturers, or for sale direct to consumers.”
Looking to the future, Smallwood says that there will be another wave: “As new computing trends, 5G, AI (among others), and even quantum computing gain traction and become more feasible and pervasive, a new wave will pick up speed.”
Where to from here?
Insurance is unique in many ways. Digital use will be helpful for some and not so much for others. Using ‘InsurTech’ can cloud the folks in the latter category.
We do ourselves better if we look at the needs for service and financials and determine how understanding the context before determining the methods can support technologies best.
What do you think?
Editor’s Note: ICTC2019
The 2019 Insurance-Canada.ca Technology Conference (Feb. 26-27 in Toronto) will focus on the expedited implementations which will include a mix of InsurTech and advanced methods and systems which will define the next generation of insurance, including:
- The Digital MGA
- ‘Customer-First’ Design & Implementation
- AI-Powered Fraud Detection
- Innovating Claims
- Cybercrime and Cyberclaims
- Sensing the Driving Scene
- UBI to Flying Cars
- The Shape of Insurance in Ten Years
- Managing Obsolescence
- Collaborative Future of InsurTech
- The Path to 2020: Digital Markeitng in Insurance
- And much more!