I remember asking our Chief Digital Officer, Curt Stevenson, about the insurance industry hitting a tipping point about a year ago. Were we really a part of a revolution? Would technology cause such significant changes that we’d be thinking about insurance in a whole new way? Was insurance actually becoming cool?
A year later, I’m convinced of it. In 2017, $2.8B in funding has been channeled into insurtech firms to date, and 163 insurtech-related deals have taken place since Q1, according to Coverager.com. The investment dollars alone tell a rich story. (Yup, pun intended.) Insurance carriers are proving that they’re not afraid to embrace change.
Not surprisingly, though, given the nature of the business, rather than revolutionizing the industry, insurers are instead finding incremental ways to take advantage of new technologies. They’re adopting, adapting, and taking a more evolutionary path to realign themselves with their customers.
In a conversation just prior to the release of “Insurance Accelerators,” a recent research paper from Celent, author and senior analyst Mike Fitzgerald shared a number of his views with me on the need for today’s carriers to incorporate new technologies into their processes. One comment stands out:
“The maximum opportunity comes when you can marry up the technology with a truly different way of developing the core insurance product,” he said.
It is the carriers that partner with insurtechs and other providers to actually transform their business models (and, by association, the products they bring to market), that will reap the greatest benefits. Improving functions like rating, underwriting, risk management, and customer contact / sales increases efficiency, precision, and insight, and gives carriers the freedom to bring new and creative products to market in new and creative ways.
P&C carriers seeking to improve or evolve should be asking themselves, “Who can we partner with to bridge this gap?” Mike and his team at Celent offer a good view into one intensive form of this kind of partnering in their report.
But enormous gains can also be made by carriers simply opening their core systems to integrate easily with the myriad third-party services available to them. At the risk of a shameless plug, this capability is at the core of the open architecture platform that underpins all Duck Creek products and of our Anywhere Integration offerings.
Evolution in today’s P&C is about learning something new, not repeating mistakes, and taking advantage of new technologies and new products in ways you haven’t considered before. It’s about partnering with more and better technologies and services to achieve the speed, efficiency, and insight necessary to win in today’s market.