Looking to The Future: InsurTech and Farm Insurance
Insurance industry, take note: disruption is here. It’s all about thinking differently – overcoming the inertia and legacy of how we’ve done things in the past.
As a disruptor myself, I’ve thought a lot about the impact of InsurTech on the farm insurance industry. And I’ve spent a lot of time dreaming about the future (or is it the present?)…
It’s not always easy, but those of us who have been in the industry for a while should really be starting to think (if you haven’t already) like millennials and future generation workers. Why? Because InsurTech WILL impact farm insurance. And please trust me when I tell you that we all want to be along for the ride.
Compare FarmTech vs. InsurTech. From my experience, it seems widely accepted that FarmTech, e.g. autonomous harvesting, is an accepted forgone conclusion, while the future of InsurTech is less accepted. That seems inconsistent. Is it not easy to see how InsurTechs can piggyback on the data created by FarmTech to provide new ways to underwrite risk and produce insurance solutions for farmers? The insurance industry has always been slow to change relative to other industries, but eventually it does – and InsurTech will only expedite future change.
The technology and data companies that are encroaching on insurance marketplaces encompass an incredibly broad range of capabilities – distribution, product innovators, data providers, MGAs, and too many combination services to count.
It’s easy to see the wide-reaching impact of these InsurTechs. But what do they herald for farm insurance in particular? Let’s think for a minute about some common farm insurance pain points:
- The ACORD application for Farm is 9 pages. That’s a heck of a lot of busy work for a pretty straightforward product. Is there a faster and easier way to transmit all of that information?
- There’s no longer enough money in Farm premiums for inspections by humans. Could drones, sensors and other new technology provide a more cost-effective and more objective alternative?
- Younger workers entering the insurance industry are well aware of technology’s value. Even if the millennial or future gen Farmer isn’t lured directly to InsurTech, what about millennial or future gen agents and underwriters?
InsurTech can address these issues through simple automation of process and integration of technology. Add a tech-friendly platform that’s agent- or underwriter-facing, providing real-time and straight through service, and you have a customer experience more similar to what’s already the norm in other industries. And that’s just the beginning. The legacy is most vulnerable where there’s a more pleasing, cheaper and/or more efficient way to do things.
Consider the “AirFarm” concept of sharing land, production, etc. Traditionally, we respond in the insurance industry with recognition of the new and larger risk as a result of new exposures, but this should also be seen as an opportunity to create new fam insurance purchasing dynamics. Similarly, consider the data output of all that sensor technology, and how that data can be used to improve risk management and reduce from severe weather, fire, water leakage, etc. Think about drones, and the potential for insurance to piggyback on the drones that farmers have begun to deploy. Or the ability to scrub customer feedback from public on-line forums.
The possibilities are endless – and as the farm industry continues to evolve, the ways for insurance to evolve alongside it will only grow incrementally. It’s really an opportunity to be open to the potential of doing things differently and embrace the changes that are already happening in farming, while actively seeking additional drivers of innovation. Where’s the fun in supporting the status quo anyway?
Disruption is here. Let’s take advantage of the great opportunities afforded by these changes, particularly innovating and improving the way the way the insurance industry meets the needs of its clients in the farm industry.