Although insurance often is considered a laggard behind other industries when it comes to adopting new technology, Mark Breading, a partner with Strategy
Meets Action, believes insurers are not alone when
it comes to deciding what to do about technology.
“The challenge everyone faces is things are
moving so fast now that it’s hard to keep up, let
alone figure out how to incorporate things into their
business,” he says. “We are in a connected world that
is becoming more connected every day. Other indus-
tries are moving fast to adopt these technologies, but
the challenge for insurers is how they connect to this
connected world. What does it mean for them?”
Donald Light, director of Celent’s North Amer-
ica property & casualty insurance practice, looks at
the new technology before us and breaks it into two
groups: technology that might make a big difference
in how insurance companies operate; and technol-
ogy that is cool, but probably not going to make a
difference in the industry.
In the first category he lists telematics, the
Internet of Things, and drones. The second category
includes biometrics, Google Glass, and bitcoins.
“I’m struggling not to use the word ‘fun’ with
these (second) areas,” he says “Fun is good, but
where is the business value. Google Glass, which is
making a comeback in some form, did go away, but
they are trying to re-launch it—maybe a bit more
quietly. It was fun, but (Google) never found a way
to create business value, at least not in insurance.”
Some technology, such as touch IDs and biomet-
rics, could make things quicker and easier—from a
policy-issuance standpoint—especially on the life
side, but its use is dependent on other hardware or
software being available with insurance companies.
“I have the Novo notebook computer with a
fingerprint identifier, which is nice, but I’ve never
used it. No insurance company has ever asked if I
have that capability,” Light said.
Light differentiates between bitcoins as a type of
non-governmental currency and blockchain technol-
ogy, which he describes as the underlying manner in
which bitcoins work. As an alternative currency or
non-governmental sanctioned currency, Light believes
bitcoins are “basically flaming out,” although if the
world economy turns bad it may make a comeback.
“If there is a social/political disruption, people
will turn to other forms of currency,” he says. “I
hope things don’t turn that bad, but it’s possible.
What Light finds more interesting from an insur-
ance technology point of view is the blockchain tech-
nology, which he claims is gaining interest in terms of
R&D with other financial services industries.
“It’s a more secure way to create and secure records,” he says. “It could find its way into insurance.
Is there an IT business case—faster, cheaper, better,
and more secure? If those are all true, why not? But
I don’t think the business case has been made yet.”
The Big Three
Breading contends there are three areas insurers
have to consider when studying the possibilities for
new technology. He points out the implications are
Drone technology is just one example of the many exciting
opportunities awaiting insurance companies that are looking
for new and better ways to operate their business.
By Robert Regis Hyle