Technology Changes Coming Faster than Ever for Insurers
Robert Regis Hyle | October 28, 2015
As Guidewire Software prepares for the start of Connections, its 11th annual user conference that begins on Nov. 2, Brian Desmond, chief marketing officer, for the technology solutions provider, discussed the importance of the user conference and some of the issues faced by the insurance industry and companies like Guidewire.
“It makes us humble to have so many of our staff meet so many of our customers and see the impact of what we do has in their lives and the lives of their customers,” says Desmond. “We also leverage the event to listen to our customers to get their perspective on the pressures and opportunities they face, and where they would like to see the products go in the future from a business and technology standpoint.”
Changes in Technology
Desmond believes new technology and the pace of technology innovation is already impacting the insurance industry at a faster rate than ever before. He remembers when he joined Guidewire nine years ago and the dominant conversation at that time was build vs. buy.” Today, that discussion is no longer a question; packaged software has proven itself.
“The sheer number of trends, including new technology, is becoming real and its pace is far faster than ever before,” says Desmond. “Our prediction is that the acceleration of this trend will quicken in the years ahead.”
Desmond points to the use of drones and the Internet of Things as examples, but there is a myriad of possibilities for insurance companies across the entire life cycle, including underwriting and rating, and the service functions of insurance such as claims and billing.
Opportunities for Guidewire
Guidewire's mission is to help its customers adapt and succeed at a time of rapid industry change and to ensure every customer is successful in their journey, explains Desmond.
“The key phrase is ‘adapt and succeed.’ Our point of view is insurers need to continually adapt and succeed in their business and that it is not just one transformation; rather it's a long-lasting journey where we continually question what is working today and what will work in the future,” says Desmond.
It is also a credo Guidewire lives by. Desmond points out the company views it as their responsibility to provide a platform for P&C insurers and improve that platform in the years and decades ahead. Guidewire maintains a technology platform needs to consist of three elements: core processing, data and analytics, and digital engagements. These elements have to work together in a unified and connected way rather than in a silo.
Trends to Watch
The trends Guidewire sees happening are not earth-shattering, but Desmond believes they provide some clarity. He predicts personal auto, the biggest book of business in the industry, will decline significantly in the years ahead. The key factors in this change are driving is becoming safer, which leads to lower frequency and severity of accidents, and people will be driving less in the future.
He points to the evolution of Uber, which began in 2009 and today earns more than $500 million just in San Francisco alone, which Desmond explains is more than three times what all the taxi companies in that city make per year. Another example is Google and its self-driving cars, which reportedly have been driven autonomously or semi-autonomous over 1.7 million miles.
“Google is learning a ton about accidents that typically are not reported to the police and the cause of these accidents,” says Desmond. “Over the last several years they report 21 percent of fatalities and 50 percent of injuries involve accidents in intersections. The data comes from the U.S. Department of Transportation.”
The autonomous cars have been programmed to watch out for specific perils and so the cars pause briefly when a light changes before proceeding into the intersection.
“It's great for society, but for conventional car insurance it is a sign that the consequences for insurers are changing. If this is a big part of your book of business you should diversify your portfolio,” says Desmond.
Insurers need to look to get into areas of new risks such as identity risk and cybercrime, which are in early stages of adoption in the U.S. market, according to Desmond. The consequence for Guidewire, he adds, is to make sure its technology platform allows insurers to get to market quickly with new products or regional expansion.
The second trend, points out Desmond, is the increasing wave of digital engagement and the expectations consumers have. According to the Pew Research Center, as of April, 2015 64 percent of American adults owned smartphones. That's up from 35 percent in 2011. Pew also reports that 10 percent of that group of Americans with smartphones has no other form of Internet access in their homes.
“This is a generation that is going to demand the ability to buy insurance and be served by companies in a digital way,” he says. “Failure to provide a consumer-friendly experience will cause a major erosion of sales and allow customer-centric companies to meet that need and provide insurance across the entire life cycle of consumer needs and expectations. It is incumbent on Guidewire to have a platform that allows companies to digitally interact with customers and employees.”
- Insurance Disruption is Happening Right Now
- Insurity Adds Strategic Investment Partner, General Atlantic
- Beyond Transformation: The Convergence of Finance, Risk, and Actuarial Functions
- The Rapid Evolution of Consumer Protection Regulation
- Talent Hunt: Finding, Attracting, Retaining Top People
- Insurers Flexing Their Distribution Models
- Technology Driving Disruption in Insurance
- Fear of ‘Next Bubble’ Challenges Life, Annuity Carriers
- Technology Allows Commercial Lines Insurers to Stand Out
- Single Sign-on Viewed as Biggest Tech Challenge for Agencies
- ISCS Observes 20th Anniversary; Scurto Predicts Major Changes Ahead
- Policyholders and Their First Impressions
- Progressive Making Progress on the UBI Front
- High and Dry: Insurers Search for Disaster Recovery Plans
- Insurers Sign The (Un)Dotted Line
- Reflections of a Retired Insurance CIO
- Mobile Device Management Just One Answer to BYOD Issue
- Lessons from GEICO and Progressive on Winning the Critical Buying Stage
- You Are a Target for a Cyber Attack
- Web-based Systems are the Next Evolution in Claims Technology
- Gaining a “Wow” Experience from Web Users
- Time to Shift from Business/IT Alignment to Business/IT Alliance
- Healthcare Insurers Changing to Consumer Model
- Organization is the Key for Selecting Software Vendors
- Analysts Expound on the Needs of the Mid-tier Insurance Market
- Finding the Cure for Obamacare’s Website
- New Software Solutions Benefit Insurers on the Inside and Outside
- Products, Market Impede Investment in Systems for Life Insurers
- Combatting Cyber Threats: Predict, Prevent, Persist
- The Future of Telematics Heads Beyond Insurance
- The Shame in Cyber Security Lapses
- Building Policy Administration Systems for the Future
- Insurers Look Into The Eyes of Their Policyholders
- It’s a New Dawn for the ITA
INSURANCE IT NEWS
- Atain Insurance Selects Oceanwide’s Bridge Insurance Software Suite
- Business Transformation Process Report Released by Majesco
- Metromile Goes Live with OnBase in the Hyland Cloud
- Majesco Appoints Thompson to Board of Directors
- Belgian Co-operative Implements Guidewire Solution
- Tropics Announces Availability of Tropics Breeze 6
- Duck Creek Appoints Chippari as CFO
- Vertafore Launches API Developer Portal, Partner Program
The Email Chat is a regular feature of the ITA Pro magazine and website. We send a series of questions to an insurance IT leader in search of thought-provoking responses on important issues facing the insurance industry.
ITA is pleased to present the 2014 Webinar Series. We have many topics for you to choose from and attendance is open to all ITA members. The webinar topics are current and exciting — ranging from predictive analytics to telematics and will focus on the direction insurance carriers need to follow for the future. All webinars are presented by insurance IT professionals along with some of the leading analysts and consultants in the field. There is no cost to attend an ITA webinar. For more information and to register for the webinar, click the “title” of the webinar below.
BLOGS AND COLUMNS
By now, you might be getting tired of hearing the term insurtech. You may also be annoyed at everyone telling you about industry disruption... READ MORE
Robert Regis Hyle
Doing things new and striving to be different are staples of American business. No one ever proclaims their new company will offer some of the “same... READ MORE
Finding insurance carriers willing to write commercial lines risks has always been a challenge for producers... READ MORE
As Guidewire Software prepares for the start of Connections, its 11th annual user conference that begins on Nov. 2, Brian Desmond, chief marketing... READ MORE
Strategy Meets Action will hold its annual Summit in Boston on Sept. 14 and the focus for this year is: Becoming the Next-Gen Insurer... READ MORE
Starting last fall when the technology company dropped Mastek from its name and became simply Majesco, its mergers and acquisitions, and hirings have... READ MORE
Who among us wouldn’t jump at the chance to improve policyholder retention? The fact is that policyholders respond to your ability to decrease cycle... READ MORE
- Vendor Views