Transformational Technologies in P&C During the COVID Era
New SMA Blog by Mark Breading, Partner, Strategy Meets Action —
Technologies like machine learning, the IoT, RPA, and Natural Language Processing (NLP) were hot topics in P&C insurance before the world was turned upside down in 2020 due to the pandemic. These and many other “transformational” technologies have great potential for insurers in the rethinking and optimization of distribution, underwriting, claims, and many other parts of the business.[1] So, it is important to ask the question – how have the initiatives that leverage these technologies changed due to the pandemic? Are personal and commercial lines carriers still moving forward with projects in 2021? Do executives still have the same expectations about the potential of these technologies to transform their business? We answer these questions in detail for thirteen specific technologies in two new SMA research reports, one covering personal lines and the other covering commercial lines.
However, I won’t leave you hanging in this blog, wondering about the answers to those questions. The short answer is yes – P&C insurers generally plan to move forward in 2021 with projects that leverage various technologies that have the power to deliver significant results and competitive advantage. The technologies we follow closely and have profiled in our reports have been organized into three strategic planning horizons: short-term, near-term, and long-term.
For both personal and commercial lines, technologies in the AI family play heavily in the short-term category. Machine learning, NLP, RPA, computer vision, and new user interaction technologies all rank high in terms of their potential to transform and the level of activity underway or planned by insurers. Technologies that fall into the near-term or long-term horizons include wearables, blockchain, voice, AR/VR, 5G, and autonomous vehicles. All have potential in insurance and will likely be incorporated into projects by innovators over the next couple of years, but will not make it into broad, mainstream application until midway to late in the decade.
Our research on transformational technologies, when viewed in concert with our SMA Market Pulse surveys, shows that in some cases, POCs and new projects have been put on hold in 2020, but all indications point to full steam ahead in 2021. Major projects already underway are continuing, and insurers state that they do not want to lose momentum for foundational projects like core systems. Projects that include transformational technologies needed to address digital gaps that were exposed during the pandemic have been raised in priority.
In many ways, the pandemic is accelerating digital transformation across all industries, including insurance. Transformational technologies will play an outsized role in that transformation and look to be important components of insurers’ plans for 2021 and beyond.
For more information on insurer progress, plans, and predictions regarding these technologies, see SMA’s two recently published research reports:
Notes
1. As a footnote, there are a number of technologies that are foundational, such as core systems, CRM, business intelligence solutions, and more. These remain vital and are increasingly marrying up with some of the more advanced technologies we call transformational.
About The Author
Mark Breading, a Partner at Strategy Meets Action, is known for his insights on the future of the insurance industry and innovative uses of technology. Mark consults with insurers and technology companies on forward thinking strategies for success in the digital age. His inventive methods and his ability to incorporate InsurTech and emerging tech into business strategies are unparalleled. Mark also leads SMA’s research program, has overseen the publication of over one hundred research reports, and directed custom research projects for insurer and tech clients. His thought leadership in the areas of InsurTech, emerging technologies, customer experience, and digital strategies has earned him rankings as a “Top Global Influencers in InsurTech” by InsurTech News and Onalytica and a place in the 10 finalists for the “Top Global IoT in Insurance Influencer Award.”
Before joining SMA in 2009, Mark spent 25 years with IBM, where he co-developed IBM’s Account Based Marketing program and led the global project office to implement ABM across all industry verticals worldwide. Mark has held both technical and business roles in sales, consulting, marketing, and business strategy and has advised insurers around the world for almost 30 years.
He is a frequent speaker at industry events; an InsurTech mentor with the Global Insurance Accelerator; and a frequent contributor of articles to Insurance Thought Leadership, Insurance Networking News, LOMA Resource, and many other industry publications.
About SMA
Exclusively serving the insurance industry, Strategy Meets Action (SMA) is an advisory services firm offering retainers, research, consulting, events, and innovation offerings to both insurance companies and solution providers. Learn more about SMA at www.strategymeetsaction.com.
SOURCE: Strategy Meets Action (SMA)