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Insurers Reminded to Look to Their Own Future

Robert Regis Hyle | October 07, 2014

At the MajescoMastek customer conference in Chicago last week, an insurance CIO made an interesting point that all of us should consider as we compete for our own place in the market—no matter what that market is. Bryan Fowler, CIO of Oregon Mutual Insurance, in a panel discussion, told the audience, “You can either keep up with what everyone else is doing or look to your own future.”

Ideally, we can do both, but too often people get caught up with the former and neglect the latter. That’s the nature of competition, though. We focus less on improving ourselves and more on worrying about what our competitors are doing.

There needs to be a balance. When discussing disruptions in the business world we’ve heard many times the story of how Kodak invented digital photography, but stuck with film—to their everlasting regret. Kodak was somewhat focused on its own future, but chose to stick with what had been working so well in the past.

Another example comes from the story of the Blockbuster movie rental chain that went out of business because it didn’t focus on what was going on around them and hoped that nothing would change. In the insurance industry this has great meaning for the agency distribution system.

Blockbuster didn’t make products, it just made them available to the public. When an easier distribution system came along, such as Netflix, they ignored an opportunity to invest in their own future and the eventual result was a big “out of business” sign hanging on thousands of retail stores across the country.

Many agents are like Blockbuster. They haven’t adapted to the gathering storm and continue on their merry way. Those that continue to be meaningful are those that have carved a place out in the market as a trusted advisor, but they have to be both aware of what is going on around them and focused on their own future.

Netflix recently announced a deal to stream video of the upcoming sequel to the award-winning film, Crouching Tiger, Hidden Dragon at the same time the film is released in movie theaters. Another Netflix deal will involve production of four films to be made by the comic actor Adam Sandler.

Is Netflix going to disrupt the movie theater business? Are they looking to their own future?

Insurers would be wise to continue their internal discussions on what the future looks like. It seems hard to believe that any insurers believe they can continue on the same path they have been following for decades. If that remains their strategy, it’s not a smart bet.

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