Amazing. Extraordinary. Powerful. Disruptive. Transformative.
Destructive. Constructive. Innovative.
These words describe what I experienced at recent conferences outside the insurance industry that were focused on
innovation and transformation. The themes were about the
revolution that is underway, triggered by the emergence of new
technology and the digital enterprise that is creating new business and revenue models, destroying long-held businesses, and
creating new industries.
This is disruption, the likes of which have never been seen
before. And it will shake the foundations of the insurance industry’s
long-held beliefs, assumptions, and business models. Technology
is now connected, creating new experiences, new products and
services, new outcomes, and new business and revenue models.
Replacing legacy systems with modern core systems is table
stakes, providing a critical foundation that allows insurers to enter the game. It will take much more than that to win in the new
digital game. Disruption is happening faster than most thought it
would, or could, and certainly sooner than many were prepared
for. Changes over the next three to five years will be significant.
Don’t believe that timeframe? Consider this: The Apple iPod,
introduced in October 2001; the Apple iPhone, introduced in
June 2007; and the Apple iPad introduced in April 2010. These
devices disrupted, and in some cases, destroyed the music, movie,
camera, phone, media, and personal computer industries and
market leaders such as Blackberry, Sony, Nokia, Microsoft, IBM,
HP, Motorola, and others.
This innovation powered the imagination and created new
industries and businesses based on social media, GPS, video,
crowdsourcing, and mobility with new leaders like Google,
Facebook, Yelp, Uber, and more. And the disruption, destruction,
construction, and innovation continue to pick up momentum,
reaching other industries and companies.
The impact of Apple leveraging emerging technologies to develop and create new solutions has been substantial to nearly every
stagnant, slow-to-change industry, even insurance. What is unique
about Apple, Amazon, and Google, is how these companies moved
from disruption to iterative innovation, leveraging improvements,
and solidifying and intensifying their impact on other industries.
Fundamentally, Apple provided a platform of possibilities, ingenuity, and innovation that initiated the disruption, transformation, or
(re)construction of existing or new industries and companies.
Creating a Paradigm Shift
A new wave of disruption, transformation, destruction, con-
struction, and innovation is building from emerging technol-
ogies, with one standing out from the pack. The Internet of
Things (Io T) has the potential to create even greater disruption,
transformation, and construction of industries and companies.
The Io T is creating a massive paradigm shift in how we view,
understand, connect, and interact with the world. Mary Meeker,
a venture capitalist, recently stated in a presentation at the
CODE Conference, “The biggest re-imagination of all is coming
from people enabled with mobile devices plus sensors upload-
ing troves of findable and shareable data.”
Just to help to understand the breadth, depth, power, and
exploding influence of the Io T, here are some statistics shared at
K The number of devices connected to the Internet exceeds the
number of people on earth, 7 billion, since 2010.
K By 2020, there will be 8 billion people on earth and 50 billion
connected devices with 5 million apps, representing nearly six
connections per person.
K And by 2035, there will be 1 trillion connected devices with
100 million apps.
The Disruptive Power of Internet of Things
Why is Io T so disruptive and why is it growing at such an
astounding pace? It’s due to the convergence, adoption, and
affordability of service-oriented architecture computing infrastructures; the cloud for storage of massive amounts of data; a
mobile communication infrastructure to connect any device,
anytime, anywhere; and advanced and emerging analytics to
consume and analyze big data.
Io T is transforming standalone products into complex
business solutions by combining or integrating sensors, software,
analytics, processors, and digital user interfaces into the product
that are all connected to the Internet. Sensors are being built into
products or embedded into things such as animals, land, people,
clothing, homes, and cars to generate massive amounts of data.
That data could be used by companies or industries, including
insurance, to create and offer new products, services or solutions.
As a result, the opportunity to reimagine “the product” from what
it historically has been into what it can now be, with integrated
value including real-time information, alerts, and services enhances the value for the customer and redefines the quality of the
customer experience. Here are a few examples:
K A bank created a savings and incentivized rewards program
Beyond the Insurance Horizon
Innovation outside insurance will disrupt, transform, and reconstruct insurance.