Insurance executives see three factors as most important to the future of the insurance industry: technology, regulation and market factors, according to a new IBM study. Big Blue also mentions that 71 percent of are using cognitive technology to better prepare for the future.
The IBM Institute of Business Value study, “Insurance 2025: Reducing Risk in an Uncertain Future,” was commissioned to explore the likely growth of the insurance industry over the next eight to 10 years. Its goal was to highlight the steps insurers should take over that time to achieve success.
Nearly 80 percent of surveyed insurance leaders reported that technology will have a major impact on their organizations. Insurance companies reportedly used to think of technology as a tool to cope with changes in markets and changes in regulation, but this study seems to indicate that insurers have been making technology integral to business models. As an example, the IBV study explores the potential impact of new technologies, including autonomous cars and connected refrigerators, and the ripple effects they will have on various industries, including insurance, as they become more mainstream.
“When considering the insurance world of 2025, we view the potential impact of cognitive technology to be very high, but the exact nature of how it will be implemented is uncertain,” said Christian Bieck, global Iinsurance lead of the IBM Institute for Business Value. “While adoption is relatively unknown, we believe technologies like cognitive and IoT will provide competitive advantage and better future-proof leading insurers.”
The study identifies four critical “no-regret moves” insurance companies should implement now to better position them moving forward. That, IBM suggests, should include:
• deconstructing and componentizing legacy systems to ready themselves to support as-a-service models;
• collaborating with partners and joining ecosystems so they have relationships with companies in adjacent areas that are relevant to their businesses;
• identifying areas in which your business needs to be leader, and formulating strategies and making investments to move those efforts forward; and
• creating a culture and design processes that enable innovation by streamlining internal processes, with central funding and investment models.
Ken Briodagh is a writer and editor with more than a decade of experience under his belt. He is in love with technology and if he had his druthers would beta test everything from shoe phones to flying cars.
Edited by Ken Briodagh