Warning Signs for Carriers
On Threats to Industry’s Future
In each issue of ITA Pro, we ask a rotating trio of insurance technology analysts their views on important
industry issues. This month the respondents are: Bill Jenkins, managing partner with Agile Insurance
Analytics; karlyn Carnahan, research director with Celent; and Ellen Carney, principal analyst with
This month's question:
What do you view as the biggest threat to the way the insurance industry
currently operates? Data aggregators? Regulatory concerns?
Unknown technologies/technology companies?
Agile Insurance Analytics
Experience tells us
insurance companies have not done
job in planning or
They lack the flexi-
bility and agility to
respond to events
that may impact their businesses.
Some key reasons that have imped-
ed this flexibility and agility include;
culture, risk aversion, old and cumber-
some technology, and lack of data/
There are other challenges outside
of their influence facing carriers including: weak economic conditions; climate
change; cyber risk; changes in buyer
and worker behavior; inferior, bogus,
and dangerous products; nanotechnology; and increasing regulatory and
compliance requirements and changes
for the industry.
Regulations are often confusing and
nebulous and require carriers to modify
and invest in processes, technologies,
and other internal structures to comply.
Few carriers possess the needed data
management solutions and will require
these carriers to not only obtain such
a solution but also put into place the
processes and skill sets to maintain and
support this type of solution.
The biggest threat
to manage a 21st
on 20th (or 19th)
Information businesses are designed
around the best information technology available at the time. In the
last century, we built and organized
insurance carriers to optimize the way
we communicate, store information,
and analyze information. Gathering
and providing information was labor
intensive and time consuming. Today,
we live in a world of super abundant data and the technology on our
smartphones is more powerful than
the desktop we used not that long ago.
For many carriers, the biggest threat
is continuing to operate as they always
have, relying on their past performance
as the indication that all is well. Technology and consumer expectations are
changing and IT can no longer just be
one expense a carrier has to reduce.
Carriers that see technology as a
key strategic lever will be able to leap
ahead of the pack. Those that don’t
will find themselves outmaneuvered
and at risk of becoming irrelevant.
Insurers of all
stripes and markets are being
pulled into a new
digital world that
many aren’t set
up to cope with.
Consumers are em-
powered by mobile
and are ready and willing to step into
roles that historically have been the
remit of the insurer, like adjusters, in-
spectors, and of course, regulators.
Insurers look to arm consumers with
tools to keep their property safe. Think
about mobile CAT models that both
RMS and EQECAT are talking about
and ways that insurers can become the
nexus of a network of repair, safety,
and health experts. Items that get
insured are getting more digital in the
connected world—vehicles that can
maneuver autonomously and homes
that we can control from smartphones.
Competition to care for this digital
information is emerging and while not
strictly “insuring” our stuff, certainly
it helps us take better care of it. Think
about AT&T’s Digital Home, Google
Helpouts, or Trov’s ability to track how
we interact with our possessions.
Insurers have to be willing to disrupt
themselves because many won’t be
able to stand up against these forces.