A recent post from Insurance Thought Leadership — “A Wake-Up Call for Insurers” — says this, in part:
Insurers have been talking about going digital for a good decade now, and seemingly everyone says the pandemic greatly accelerated the trend over the past three years by forcing us all to interact remotely. Yet ACORD says it found in a recent survey of the 200 largest insurers worldwide that “fewer than 25% have truly digitized the value chain, while more than 10% are not appreciably leveraging digital technologies within their current business processes. Further, more than half of the insurers in the study are still exploring how digitization can be applied against their business model.”
This is like saying you can build a skyscraper from the lightning rod down. No, you can’t. Likewise, you can’t take insurers to task for having failed to adopt a technological capability — digitalization — for which no foundation had been constructed. Here’s why we think that:
Let’s Go To the Replay
The working environments seeming to be promised by digital transformation would have been more fairly and constructively undertaken if:
- The modern core system with which attendant digital capabilities have to interact had been in place first.
- Carriers hadn’t attempted to put the digital cart before functional horse (see #1).
- Startups and insurtechs had paid more attention to the intricacies and peculiarities of insurance than they paid to the proverbial customer journey.
Instead, the industry allowed itself to fall for calls for AI preparedness that were grossly premature. So, it hired data scientists on staff to optimize AI and data strategies. It got way ahead of itself with driverless vehicles without paying due heed to how to insure them, whether to insure the the driver, the passenger, or the automaker, along with the related, litigation concerns. And it fell head over heels in infatuation with blockchain and cryptocurrency.
What’s the Price?
There are several lessons to be learned here. Chief among them is this: Choose your experts wisely. It may not be fair to say all the ostensible experts were wrong, per se. But they were misleadingly, enthusiastically premature. Had they known a bit more about the business of insurance, insurance companies could have made significantly more progress in fulfilling the digital promise. And had insurance companies chosen their experts more wisely, they likely would have saved significant amounts of time and money.
With any luck, we’ll be smarter next time.