Making Strides and Planting Stakes
It’s time someone put a stake in the ground regarding how we talk about technology in our industry, so here goes: we’re getting better, and we need to speak and act that way.
No more doldrums. There is forward thinking. There are expectations being met and exceeded. We are turning the page. We don’t have time to continue to demoralize ourselves about being last, about being the “one” industry that lags behind, about being unable to “get it.”
There are firms out there doing more than they’ve ever done—even beyond risk management—thanks to the computing power of technology and data analytics. There are firms out there providing more consumable insight and value that their clients didn’t know they wanted or needed until it was presented to them. There are firms out there using technology as a way to attract and retain talent. So my stake has been placed: we are making real strides in this area and should be thinking of ourselves differently at this point. We’re not where we were even three years ago. We can tell a better story. And that’s something to be excited about.
As I challenge you to change any negative perceptions you may have about our sluggish uptake of technology (particularly on the commercial side), I also invite you to change the way you may think of technology in our industry in general. Don’t overcomplicate it. Don’t think of it as some hard-to-understand algorithm. On that note, whoever coined the term “insurtech” should be tarred and feathered. I’m kidding, of course, but it’s an intimidating word that doesn’t quite roll off the tongue when you’re trying to have small talk at a cocktail party.
We need to think of technology as a way to build relationships with customers and better understand them (and in turn, for them to better understand what we know about them—that’s important, too). It’s behaving much like a retailer—thinking about and using technology as a tool to create efficiencies and alleviate back-end grunt work but, more so, as a tool to improve the customer experience and make yourself more valuable as a broker and an insurer.
Insurtechs are innovating the way the insurance industry operates. If you flip that on its head though, it’s really customer expectations that are creating the business transformation. It is our clients and our customers who are pushing improvements to their insurance buying experiences to match their personal buying experiences. It is our clients and our customers who are demanding more time from us as risk management partners and less time on processing paperwork.
I know all of this is happening fast and has created anxieties about whether or not you can keep up. But take heart—technology is not some secret formula to get rid of you, the broker. It’s about making you better at what you do. I will always argue that a digital-only strategy will not work. When you experience a loss or are confused about something, you want to talk to a human. Both technology and the human element are necessary to create real value and build trust. In fact, research tells us that most insurtechs are focused on enabling the insurance value chain as opposed to disintermediating and disrupting it. According to the McKinsey Panorama Insurtech database, 61% of insurtechs today focus on providing services to insurers, simplifying and digitizing parts of the insurance value chain. Only a small proportion—9%—are aiming to replace the incumbent [insurers].
Firms today have options when it comes to technology: build new solutions, buy existing solutions, partner with insurtechs to augment their capabilities, or do a combination thereof. With any of these strategies, I believe the most important thing to remember is the customer experience. My friend Mike McGavick (page 50) articulates well the intertwinement between technology and the customer: because of the insight technology brings, we can create products that are inherently more trustworthy.
And isn’t that what our industry needs?
Let’s stop beating ourselves up. We’re getting there. My stake says so.