A couple of weeks ago, I had the pleasure of attending the 2nd Annual InsurTech Connect Conference. Here, in no particular order, are some of my major takeaways from the event:
- The people who say the age of face-to-face meetings is over are dead wrong! This event last year drew about 1,100. This year, there were 3,500 attendees, and a waiting list of a few hundred. Space has already been booked next year for an expected crowd of 5,000. If people aren’t coming to your event, it’s because they don’t see value in it. Bring value by combining interesting, cutting-edge content, world-class speakers and the opportunity to network with “the right people,” and people will attend your event.
- Attendees generally fell into one of four categories; 1) Insurance industry incumbents (both from the carrier and agent side); 2) Technology based solutions provider; 3) VC (venture capital firms) and 4) Technology based insurance providers (the “disruptors”)
- I sensed somewhat a change in attitude from last year to this year, in that last year it seemed more about the “disruptors.” (Firms that distribute insurance to the consumer using wildly different models of either distribution (like Lemonade, with asking just a few questions from your mobile phone) or new concepts in underwriting and pricing (micro-duration, single item insurance, like Trov.)) This year, there seemed to be far more firms that are positioning themselves as “solutions” providers for the incumbents. The fact that money is being dropped to develop products and solutions for the traditional channel is a good sign. But don’t misunderstand, there are still a ton of ideas and concepts being built on disrupting the industry.
- Drone technology and advancements in AI (artificial intelligence) are offering some really cool, super hi-tech solutions for all sorts of things, and insurance is no exception. Many of you probably saw the recent article where the NC Highway Patrol will soon be using drones to analyze accident scenes. Really cool, right? Well, now imagine insurance companies doing the same sort of thing. There were four vendors in the exhibit hall that had “batting cage” style booths where they could fly their drones around. Combined with software, these drones can do things like measure building, inspect roofs, confirm standpipes for sprinkler systems, and more. Imagine an adjuster not having to climb onto a rooftop, but instead deploying a drone to do the inspection. This seems as though it will be a very common practice within a few years.
- Lots of the solutions providers were focused on the company side, and many of those were offering solutions with data analytics and systems communications. We all know how fond insurance companies are of having multiple systems that don’t all communicate with one another.
- One sub-group of solutions providers were focused on loss-control, particularly in the area of training and safety. There are some really cool driver monitoring and safety programs.
- Several other solutions providers were all focused on helping agents with their operations. (From assisting with form completions, marketing, policy analysis, finding markets, customer service through chatbots and more.) Lots of companies are willing to put their future on agents still being a critical part of the insurance process. Check out: riskgenius.com; www.askkodiak.com; www.brokerbuddha.com and www.pronavigator.io as examples.
- The Internet of Things (IOT) and autonomous cars are going to have societal implications (and thus insurance implications) that I think we are only just now starting to grasp. In the short-term, we need to be thinking about what starts to happen to the insurance industry as claims frequency starts to decrease due to smart home features and safety features on cars (emergency braking and steering that we all see advertisements for now)? What happens to automobile insurance and the concept of liability, once my car has an “auto-pilot” button that I will engage periodically. Think about in the very near future, if I am in my car driving/riding to Charlotte for a meeting. During the course of the drive, the liability for my car could potentially be switching back and forth between myself and the auto manufacturer, depending how frequently I engage the “auto-pilot” feature. Will this be the impetus for usage-based auto insurance to finally increase in popularity? Only pay for coverage for the miles in which you were actually the responsible party?
- Using data to make intelligent business and underwriting decisions will continue to make great strides. Some insurance companies have been doing this with autos for a while (Progressive with SnapShot), but now companies are also able to collect tons of data about you through your smartphones, your homes (through IOT) and even through your wearable devices. There are already health insurance companies offering discounts to customers that workout frequently, which they monitor through a wearable device. That is the sort of thing that is the very tip of the iceberg.
- AI and chatbots are real, and they will be impacting the insurance industry in significant ways in the coming years. Did you see where IBM’s Watson recently replaced 34 claims workers at Fukoku Life Insurance Company (Google it)? Various solutions are being developed; everything from replacing backroom operations with AI to having AI assist with underwriting (imagine submitting a picture of what you want to insure, and AI will do the rest. AI will analyze the photo and be able to gather tons of information about the item. For instance, it will know the make, model and features of an auto, firearm, piece of jewelry, etc.)
The world is changing REALLY fast. Incremental change is only going to cause one to fall further behind the curve. We’ve got to be looking for and thinking about fundamental change to our business models. Let me know your thoughts on all of this!