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Preparing for War with Technology Companies

Robert Regis Hyle | April 14, 2015

“Technology is at war with the insurance industry, but insurance doesn’t know it yet.”

A statement like that will gain some attention. The person who spoke those words, Steve Mariano, CEO of Patriot National, certainly woke some people from their lethargy when he urged his audience to be ready during the keynote address at the inaugural ITA LIVE conference on Sunday.

To be fair, Mariano wasn’t referring to the technology used by his insurance operation. He spoke highly of the value Patriot CIO Judy Haddad has brought to the company. Instead he referred to the large technology companies that appear to be lurking in the background waiting for an opportunity to grab some of the insurance pie.

After all, by law, virtually every American needs some type of personal lines insurance. Insurers feel comfortable in that knowledge, but as Mariano suggests, companies such as Google, Amazon, Apple and others are already making plans to challenge some of the insurance giants that dominate personal lines.

At the ITA LIVE conference, one insurer suggested that state regulators, of all people, are the last line of defense for traditional insurance companies. Many that look at insurance as a pathway to greater riches don’t want to complicate their corporate lives by dealing with regulators in all 50 states. They would certainly welcome intervention by the federal government to allow licensing by one body.

It hasn’t been that long since some of the industry’s larger carriers were espousing the same hopes. It might just be a case of be careful what you wish for.

Insurers don’t have the capital that large technology companies have amassed, which allows them to move quickly. There might not be much insurance carriers can do to fend off a challenger such as Google or Amazon, but those that aren’t at least concerned with the possibilities such companies can create for themselves in the market are ignoring what could very well be the war that Mariano predicts is already underway.

 


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