Digital Insurance is a bunch of gibberish
Chris Cheatham
Passionate about making youth sports more fun | Make custom cards at statlegend.com
"Nowadays everybody wanna talk like they got something to say
But nothing comes out when they move their lips
Just a bunch of gibberish" -Eminem - Forgot About Dre Lyrics
As I've been surveying the insurance technology space, these lyrics keep coming into my brain. I wrote a longer post on the state of insurance technology, but I wanted to expand on those thoughts for my LinkedIn followers.
Insurance must move past Digital. I see a lot of talk about "Digital Insurance," particularly from the legacy insurance software companies out there. I can't state this enough: going "Digital" will not save the insurance industry. Using a CRM system is not enough. Converting your paper files to digital files is not enough. The rest of the world has moved on. Insurance needs to move beyond "digital" in the next five years, or it will be a sitting duck for some Uber-like disruptor. Artificial intelligence, machine learning, and algorithms are coming down the pipe. The winners will adopt these technologies, like Swiss Re adopting IBM's Watson. If you are interested in learning more about insurance and machine learning, I've posted a primer.
Hackathons are not the answer. According to a recent article, insurance hackathons are on the rise. There is one little problem with hackathons: rarely does anything important come out of them. Hackathons are a learning experience for the participants. Most people that attend have no intention of following through on the ideas. This is not a bad thing -- again, it's a learning experience. But insurance companies move notoriously slow on technology. Insurance hackathons may make participants feel good but I highly doubt actual results will occur in the form of new products.
We will know #insurtech has moved past the infant stage when everyone agrees on a hashtag. There are a ton of these hashtags out there: insuretech, instech, and insurtech are the ones I recall from my brief survey. Can we all agree to use #insurtech?
We will know #insurtech has moved past the adolescent stage when people stop lumping it into the #fintech bucket. Banks and Insurance companies are not the same thing. They have different needs and pains. And the technologies that serves them are different.
We will know when #insurtech has matured when personal and commercial insurance technologies are not lumped together.
That's all I got for now. What do you think?
Thanks for post! You are on to something here. My thought is that legacy insurance companies have very valuable assets that can be monetized in the future (called api-economy or something else). The trick will be to understand WHICH assets are of value, and HOW to expose them to the eco-system. Another challenge is that insurers work in silos with great things done in each silo, but no communication between those.
Lecturer at St. Paul's University
9 年Hi Chris, i concur with you. Insurance industries are lagging behind in the implementation of information systems. I am from Kenya and this is especially true as compared to the banking industry. In East Africa, there are thousands of insurance brokers who do their work manually. Part of the problem is that they do not have a single system in which the can manage their customer and enterprise data while at the same time linking up with the insurance companies that they represent. I would welcome ideas on how best to go about developing that kind of a system from someone who has some experience in the industry.
Head of Financial Lines @ Picnic Labs
9 年Hi Chris, fully support the direction of your points but (thought I would get this in early) we need to be careful to separate 'how' a company does business as opposed to 'what' they do. Digitalisation/ legacy rationalisations etc etc are efficiency enablers e.g. redefining/rebuilding/decluttering historic patched and amalgamated systems. These create operational efficiency and typically wildly inaccurate return on investment estimates! Insurance companies, and I am fully supportive of your view here, need to think beyond. There are any number on demonstrable applications of true innovation in the commercial world but precious few in the insurance world. Insurers tend to think that creating a property and a liability policy for a new 'thing' is innovation, big mistake. I think back to the movie Trading Places where Mortimer and Co. fell victim to orange juice and pork belly positions. Where in the insurance/risk transfer landscape are the unknown and unrealised correlations. Machine learning and AI could open huge new markets. The collective challenge is to then get consumers comfortable that the leopard wants to change its spots. Now following you! Cheers Chris,
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9 年Chris Cheatham check out Life Design Analysis !
Talent Sourcer @ GreySource | Brand, Marketing Strategist x-Microsoft, PayPal, Rosetta Stone
9 年I work at an insurance tech startup. What I've seen in the market are small apps being created and purchased by carriers or competitors. We are working on software, a product that will truly reinvent the work of independent agents. However, investors seem more interested in rapid apps, not the work it takes to really transform the industry.