In part one of this series, we wondered why the seeming infatuation with insurtech continues apace as if software that’s already on the market were inadequate to overcome reliance on legacy technology. And we asked this question: “Since many of those new [insurtech] wheels are unproven (hence, the risk), why wouldn’t we work with the ones that already roll?”

We have no desire to appear defensive. But we’re compelled to say we’ve worked — and continue to work — hard to provide the best of both worlds. Here’s why we say that:

First, we’re not peddling legacy technology. (Why in the world would we do that?) On the contrary, we developed our software and our business model to take the pain out of replacing legacy technology. Second, we developed our software to enable the integration of whatever aspects of insurtech demonstrate productive, business-improving value to our customers.

20/20 Foresight

“Hindsight is 20/20” is a very common expression. We can’t help but wonder why people wouldn’t want their foresight to be a little more acute. Case in point: In part one of this series, we also excerpted some text from an article we’d read. Some of that text said this:

Successful companies often struggle to anticipate and adapt to competition from new entrants … until it’s too late.

We’re not sure what constitutes successful in that sentence. It seems to us companies that struggle to anticipate and adapt to competition from new entrants until it’s too late might be a lot of things — like unsuccessful or gone — but not successful. But setting that aside, it seems to us that if companies choose to work with vendors that keep their eyes open, that take advantage of the investments being made in insurtech, that recognize the winners, and that make their software flexible and configurable enough to integrate and employ those winners, they’d be much more likely to be successful. And they’d significantly mitigate their risks of being too late.

It’s a good thing developers and investors aren’t willing to settle for the status quo. But neither are we. That’s why we work hard to ensure our customers don’t have to settle for anything, especially legacy technology.

Remember: The software you choose may define your legacy.

In a rather random Google search, we came across a paper published last year by the global IT consulting firm, Coforge. The title of the paper is “8 Challenges Threatening the Insurance Industry in 2020”. Since threatening sounded rather ominous (we might have gone with facing), we decided to give it a read. Lo and behold, we found almost all of the challenges listed by Coforge to be interrelated.

Here they are, in order, in bold, followed by our own thoughts on the matters:

1. The increasing demand gap between the multi-generation customer bases. This point is well taken. But there are gaps between all generations — social, cultural, intellectual, musical, expectational, etc. That’s life. Some of those gaps, particularly as they pertain to dashed expectations about job security and the desire to be one’s own boss, led to …
2. The untapped gig economy. No generation thinks the preceding generation got it right. It’s no wonder the gig economy blossomed.
3. The fast changing digital space, systems, and technologies. The reality of this point is attributable to changes in technological capabilities, of course. But it’s also attributable to #1 and #2 — bridging the demand gap and tapping the untapped gig economy. The decentralization wrought by #1, #2, and #3, makes #4 inevitable.
4. The growing concern over the privacy of customer data. Well, yeah. Decentralization and broader distribution of work, transactions, and the data associated with them yield liabilities in security. And them comes …
5. The added strain of COVID-19. Add the decentralized, distributed chaos of COVID-19 into the challenges posed by #1, #2, #3, and #4, and Coforge’s notion of threatening might be correct after all.
6. The risks associated with the ever-evolving socio-political and economic landscape. And while the concerns of our customers aren’t necessarily socio-political, we’re certain the ever-evolving economic landscape is a direct contributor to #1, #2, #3, #4, and #5.
7. The competitor threats. We don’t mean to be dismissive. But competitor threats are like generational gaps. They’re a part of life in 2020, 2021, and every other year.
8. The effect of global-level changes on the insurance sector. The biggest concerns for our customers are the constantly changing regulation policies. And we agree with Coforge here:

The only way to be prepared and cope with such issues is to have an agile team with a robust digital infrastructure and a standardized code of conduct. 

While we surely have to be aware of all the changing conditions in our environments, our first priority should be the work at hand. Whether you’re in the insurance industry or any other industry, we might all be better off following the advice of Thomas Carlyle (1795-1881).

Know what thou canst work at, and work at it like a Hercules.

It still pertains. So, don’t worry so much.

We happened to see a piece on the Gartner website the other day that said this, in part:

Policy administration systems [provide] full end-to-end life cycle management … vendors are increasingly offering a comprehensive range of products with vendors looking to alternative capabilities to differentiate their offerings; for instance, front-end portals with embedded engagement tools.

We have to admit that every time we see something described as end-to-end, we think of two things: The first is a short story by Ernest Hemingway called, “The End of Something”. It was written during what some scholars refer to as Hemingway’s suggestive period, in which he was trying to say something without saying anything. The other is The End of It, a beautiful novel in which a young American artillery officer is driven nearly insane by the barbarity of World War II but is saved by the beauty, the people, and the culture of Italy.

But as you might guess, this isn’t supposed to be a post about literature. So, we’ll get back to our Gartner reading.

Vanishing Point

We have to admit to being perpetually perplexed by the phrase, end to end, for two reasons. First, regardless of the business you’re in, why would you want to suggest the end of anything? We completely understand that nothing lasts forever. But no matter what you’re creating or selling, why invoke even philosophical curiosity about when it might cease to be created or sold?

Policy Lifecycle

Bill: Well, ya know, everything has to end sometime.
Will: I know. But we just started.

Second, maybe we’re being too literal. But if we’re talking about a lifecycle — in this case, a policy lifecycle — where could we say it ends? Isn’t a lifecycle self-perpetuating? Shouldn’t it sustain itself by the fulfillment of commitments, responsive service, and operational transparency? And where or why would it end? When the policyholder stops paying premium? When the insurer refuses to pay a claim and the policyholder takes his business elsewhere? Are we too conservative? We don’t know. But setting aside the argument that the insurance industry is and should be conservative, why even flirt with any of that?

We get the idea that end-to-end is supposed to connote comprehensiveness, a set of processes from policy application to claims adjudication, with billing and a few other things in the bargain. But why not say comprehensive instead of suggesting some point of termination?

Why take it to the vanishing point?

Now that we’re more than halfway through 2021, we were thinking about the de rigueur predictions that will soon be coming our way for 2022. For some reason, that put us in mind of the classic Budweiser commercial from 1999. After that, we decided to get serious; although, we really didn’t feel like it.

It’s safe to assume that most of the 2022 predictions for insurance will have to do with technology. The list will, no doubt, include:

• Artificial intelligence (AI). When more and more homes and cars contain voice-activated assistance, the insurance industry will continue to adopt AI as it can, particularly in the interests of personalizing the policyholder experience and the policyholder’s rates. How will AI do that? With …
• Machine learning. Simply put, machine learning is stored data that constitutes acquired experience. Combined with AI, that acquired experience can be analyzed and translated into actionable information and automated processing. And where will all this stored data come from? From …
• The Internet of Things (IoT). Given the connectivity of everything on the Web — including smart-homes gadgets, automobile sensors, wearables, online retail sites, referral-program software, and who knows what — insurers that don’t tap into IoT technology are going to miss the boat and then some.
• Telematics. See AI, machine learning, and IoT.
• Social media. Given the pace at which things evolve, it’s interesting to look at how quickly definitions of things like IoT seem to evolve. They used to focus on hardware devices. Now they include every social-media site imaginable, all of which are tracking us like bloodhounds in the woods or sharks in the water.

Sneak Peeks

Chances are pretty slim that we’ll end up in the fortune-telling business. We’ve been developing insurance technology for so long at this point that a career change might not be the most prudent decision we could make. But you really don’t need powers of prognostication to see what’s coming for the insurance industry, technologically speaking.

The industry will continue to follow its conservative nature, as it should. It’ll prudently adopt technologies as it can. It’ll wisely heed the needs of its policyholders. It’ll stay a few steps back from leading edges, which is a much safer place to be anyway. But in the end, it’ll come around, as it always does.

That’s what’s up.

Figure A

We seem to have been writing and speaking a good deal lately about change — the changes undertaken during the COVID pandemic, the changes that could have and should have been considered before the COVID pandemic, and the changes we should be undertaking now in anticipation of the next pandemic or the next catastrophic business interruption. In particular, we’ve been writing and speaking about digitalization, the adoption and adaptation of digital technologies for business processes. In other words, the conversion of text, pictures, or sound into digital form for automated processing on computers, as opposed to the manual processing of analog media like paper or whiteboards.

During all of that writing and speaking, it occurred to us that the lion’s share of the friction being experienced in the move toward digitalization is attributable to rates of change. In general terms, we’re referring to the technology-adoption curve that’s typically rendered like the image in Figure A. Somewhere between the so-called innovators and the early adopters, there’s a gap. Skepticism, fear of change, and fear of failure live in that gap. As people begin to creep across that gap, the early majority and the late majority adopt a given technology as it begins to succeed and make its adopters feel safe. By the time the laggards get around to adopting the new technology, it’s already being superseded by a newer technology. And on it goes.

Context, Please

In more specific, insurance-industry terms, the gap exists between policyholders (and prospective policyholders) and the insurance companies with which they choose to do business. And the insurance industry’s historically slow pace of technological adoption and adaptation is creating greater friction and lost opportunity. To be fair, individuals (like policyholders and prospective policyholders) can explore and embrace technological advancements — and change their behaviors and their expectations — more readily and easily than companies and entire industries can. But that reality notwithstanding, friction and lost opportunity exist.

We should bear in mind that there are numerous definitions of legacy. Two of them are:

1. anything handed down from the past, as from an ancestor or predecessor
2. a gift of property; a bequest

If we remain mindful of both of those definitions — and if we embrace the technological change that shapes the behaviors and expectations of our customers — we can transform #1 into #2.

That will bring our respective rates of change much closer to each other.