Marcus Ryu’s kickoff presentation at Guidewire’s Connections 2015 started with an appropriate reference to Lloyd’s Coffee house in London. Not only was Lloyd’s the birth place of insurance, but it was also home to the seafaring population of London in the 1700s. Calm waters, rough waters, and the uncertainty of seafaring are certainly relevant to today’s insurance environment.
Specifically, it was noted that major trends are rocking the waters of the insurance industry:
Digital expectations permanently transforming sales and service outcomes
Declining personal auto risk combined with increasing automobile safety driving insurers to focus on other lines of business
Non-traditional entrants to insurance (e.g., aggregators including Wal-Mart and Google)
New insurance-relevant technology (e.g. Internet of Things and drones)
New emerging categories of risk requiring intermediation including cyber insurance and supply chain disruption
Historically, large-scale business trends have been managed by jumbo insurers through extensive supplies of human and financial capital, and sometimes ignored by smaller insurers, believing that their markets were different. The demographics of the insurers at the conference — large, medium, small, multi-national, and spread across product lines — clearly supported Marcus’ contention that agile and modern technologies are imperative in dealing with the rough waters insurers are sailing upon. No insurer is immune from the full breadth of today’s volatile marketplace.
Another seafaring reference struck me. Amassing goods, finding a captain, crew, and ship, actually sailing from England to North America (if they made it), and then finding buyers and transporting goods, spanned many years in the 1700s. Most of us can relate to IT projects that go for multiple years. The encouraging point raised was that major IT transformation can happen in months. Cases in point: Basler in 15 months, Endurance in 9 months, Hamilton in 7 months, and L’Olivier in 11 months.
Given that the rough seas of change aren’t going to calm anytime soon — or ever — choosing technology that can quickly respond could be the difference between a successful voyage and foundering in competitive depths.
Karen Pauli is a senior executive advisor in the Insurance practice at CEB TowerGroup. She covers a wide range of topics in property and casualty insurance, specializing in distribution, underwriting, claims, predictive analytics, core systems and business optimization.