I recently spent two days (10/22-10/23) at the Society of Insurance Research (SIR) Annual Conference in New Orleans where a line-up of insurance executives and intelligence analysts talked about ways the insurance industry can leverage research, analytics, competitive intelligence and analysis techniques to get past the hype and develop effective strategies to move forward.
Here are just a few of the many interesting insights gathered at the extraordinarily intensive conference.
Implementing digital transformation will require an integrated approach across departments as well as a companywide culture shift. It will not work if executives are on-board but middle managers are not, said Robert Mozeika, Munich Re’s innovation executive.
Competitive intelligence is not just about understanding what your competition is doing, but having a deep understanding ever changing market conditions, said Dr. Ben Gilad of the Academy of Competitive Intelligence. He suggested companies test strategic moves through role playing, with participants taking the parts of high-impact players.
Gilad had some advice for us information professionals as well – unless you can turn your insightful intelligence-gathering reports into action, they are useless. That’s why we need to become the trusted “sense maker” to our company’s top decision makers.
Innovation by insurance companies – customer experience
This year, SIR conducted a consumer survey on innovation by insurance companies. It found that auto and homeowners insurers were considered “pretty innovative” by 40 percent of respondents when compared with banks which were considered “pretty innovative” by 46 percent. This is a “pretty interesting” finding! When was the last time you heard about a new and exciting bank product?
Interestingly, there was a whopping 365 percent increase in the percentage of people reporting an increase in communication from P/C insurers regarding simplicity and ease of use of their products. It looks like people don’t equate improvements in ease of use and simplicity with innovation.
When asked which three things insurance customers would change through new technology or innovation, the top three were: privacy, ease and personalization in that order.
Artificial Intelligence (AI)
Reliance on AI is expected to increase in the next 20 years. How will AI change the world of insurance? According to Peter Grimm, CEO of Cipher Systems, it will involve:
- The explosion of data from connected devices leading to new product categories, more personalized pricing and increasingly real-time service delivery.
- Increased prevalence of physical robots (drones, self-driving cars, autonomous farming equipment) will lead to shifting risk pools, changing customer expectations and new products and channels.
- Standardized data frameworks and formats will lead to highly connected data ecosystems between multiple private and public entities across many industries.
- Advances in cognitive technologies (machines that mimic human learning) will enable products that re-evaluate risk in real time based on consumer behavior.
Chatbots and roboadvisors are already making roadways into the insurance industry and according to a survey by AXA; 34 percent of millennials want to interact with their insurer online only which shows that the market is prime for robo-advisor interaction.
Here are a couple of books recommended by speakers that I can’t wait to dive into.
Geeta Wilson, vice president, consumer experience at Humana, recommends Competing Against Luck: The Story of Innovation and Customer Choice by Clayton M. Christensen. The author, a Harvard Business School professor who coined the term “disruptive innovation”, introduces the concept of “jobs to be done” theory in this book.
According to the theory, instead of asking customers what they want, companies would do better to get a deep understanding of what their customers do at the point when they require their product. Then the company needs to invent ways to help them do it easier, better and faster. Companies need to become obsessed with solving their customers’ problems or as Geeta put it, they need to “fall in love with the problem.”
Another book I look forward to reading is Professor Al Naqui’s The Beaver Bot of Yellowstone: Pure-Play Leadership for the Artificial Intelligence Revolution. This book, targeted towards business leaders, promises to be an accessible guide through the mysterious and complicated cognitive transformation that firms are in for if they want to stay alive in the dawning age of AI.