For those of you who remember the comedian George Burns,
one of my favorite quotes from him is: “I look to the future
because that’s where I’m going to spend the rest of my life.” It
certainly felt that way recently when I attended the ITA LIVE
conference in April, which was aptly titled Today/Tomorrow.
What with client and prospect meetings, speaking engagements, and exhibit hall hours, I don’t usually find business
conferences and conventions to be particularly relaxing or
informative. Like you, I have heard what I have to say numerous
times before. Refreshingly, this was not the case at ITA LIVE.
For once, I got to sit, listen, and enjoy a series of interesting
and provocative presentations which ran the gamut from the
in-the-trenches realities of core systems replacement to the figurative heady heights of cognitive machines and the literal heady
heights of drone technology. All, of course, as they relate to the
endeavor of selling and servicing insurance.
Given that I spend most of my time thinking and talking
about the “in-the-trenches realties of core systems replacement”
I’d like to talk about something else for once—the future, or at
least how it looks today.
Insurance is IT/IT is Insurance:
I have long held the view that given that our industry has no physical
product and deals only in data—applications, contracts, bills, claim
reports, money—we must be, by definition, a data-based industry.
And yet for so long we appear to have been a data-poor industry. Ask
any senior insurance executive how they manage their business and
few will start by saying, “Let me show you my dashboard.”
Of course, we just glided right across the distinction be-
tween data and information. Any competent insurer can answer
the question “How many policies do you have in-force?” or
“How many large losses are you carrying?” Few insurers can
say with any specificity why a policyholder buys their product
or what actions they could take to increase submissions by five
percent from a given group of agents.
These latter questions are largely still in the realm of
anecdote and speculation—for now. What is clear from the
conference is that in the very near future nothing will happen in
insurance—back office operations, distribution, and, increasingly, customer experience—without significant technology
enablement. This covers a broad spectrum of activities.
The Machines are Coming
When we say “machines” we tend to think of robots—a gar-
rulous C3PO or a hyper-cute R2D2 (by the way, drones are
robots, too, as are self-driving cars) and they are out there doing
insurance tasks now. But what about Thinking Machines? Most
of what we read about the impact of machines on our work-
ing lives, and indeed whether or not we will have work in the
future, addresses the ability of robots to replace manual, even
skilled, workers. But now there are machines that threaten to
outperform the one thing we have always held to be superior—
the human brain’s ability to think.
Cognitive machines are coming and they will be appearing at an insurer near you in the next few years. The potential
is both exciting and scary. One speaker, Craig Bedell from
IBM, described how
Watson can read
and understand the
written word, can reason, learn, and build
hypotheses to which
it attaches confidence
estimated 80 percent
of the data in the
world is “dark.” With
much of this can now
be captured, understood and acted upon.
Currently, Watson is
as powerful as a human brain. In the next decade Watson will
be able to outthink all the brain power alive.
So, it’s not “just” machine operators and truck drivers who
will be replaced, it could be lawyers (applaud now), underwriters, claims adjusters, and even doctors. In one application, Watson reads and assimilates thousands of medical journal articles
and case histories every week on the subject of cancer—a task
no single human can do. Watson then uses this ever-growing
knowledge base, in conjunction with specific patient data, to
recommend treatments for individual cancer sufferers, which
doctors are now following.
Think about that for a moment. Even in its infancy, cognitive computing is capable of augmenting or even replacing the
most sophisticated tasks we as humans perform. In the insurance field, cognitive technologies are showing up in predictive
Back to the Future
Sessions at ITA LIVE 2016 painted a different picture of what the insurance
industry will look like in the not-too-distant future.
By George Grieve