Insured for the Digital Future
According to a report from the Massachusetts Institute of Technology, Microsoft has not been shy about expressing its interest in creating the essential building block of a quantum computer. The quantum computer would be a quantum leap in human progress. It would be able to tackle calculations that today's computers simply are incapable of carrying out. Microsoft is already talking about the many applications of such a super-computer - an innovation that could potentially turn around the technology industry altogether.
I bring up the quantum computer because I want to create a dichotomy for my readers. Now that you're excited and thinking about what a completely new kind of computer could do, switch gears and think about an industry where innovation has been, until very recently, almost non-existent: insurance. Known to be a conservative industry, insurance has traditionally been sold rather than being bought - a business model that has remained just the way it is for centuries.
Using drones to survey damage after a disaster [ Source: https://www.youtube.com/watch?v=jCkMf-hFOZo ]
Who knew a day in the park could become so complicated? Ever since man took to flying - first in large balloons, later in planes, and then even in helicopters - there have been miniature versions of these vehicles that have delighted hobbyists and flight enthusiasts for more than a century.
But hook a remote camera onto one of these devices, and you have a completely different device in your hands. At least that's what several countries and a bevy of recent laws have determined. A remote-controlled, unmanned flying device with a camera attached to it is, in many jurisdictions, considered by law to be a 'drone'. Drones are unmanned aircraft systems (UAS) with a wide range of commercial uses such as sports photography, atmospheric research or even goods delivery. Since drones do not have human pilots, they are remotely operated by using data link transmissions. They can be installed with powerful cameras, sensors or facial recognition technology. Operating a drone is a completely different ballgame, as far as the authorities are concerned. Instead of a day in the park flying a model airplane, drones might constitute trespassing or even invasion of privacy on the part of its owner.
The insurance industry globally is undergoing a major transformation. Pervasive technologies, growing millennial consumer base, fierce competition and increased regulatory interventions are changing the very fundamentals of the insurance business. As customers become more selective and competitors more agile, it is imperative for insurers to continuously innovate their product portfolio and distribution mix to stay ahead of the competition.
Today's customers play an active role across the insurance policy lifecycle, starting from product development to claims disbursement. The product-centric business model, is slowly but surely making way for a customer-centric one. In this evolving marketplace, one in which customers are calling all the shots, distribution function is going through a significant transformation.
For managing insurance run-off, IT strategies include complete outsourcing of the end-to-end IT operations and platform-based IT or business process outsourcing
Is it too much for consumers to expect steady income streams from dividends off annuities, life insurance policies, and the like? The answer - theoretically, at least - should be a resounding yes. But try telling that to life and annuity providers in today's world, who are going through a challenging period. You name it and they're dealing with it: sustained low interest rate, fierce competition, increased regulatory scrutiny, and changing customer preferences.
So the pressure is on to find new ways to extract value from every corner of the company so that consumers don't get stuck with flimsy returns. Is it any wonder, then, that some prominent insurers are spending significant time, money, and resources to manage their closed block business? This business has become the 800-pound gorilla in the room. Closed blocks have piled up over the years because of the discontinuation of unprofitable or non-strategic products.
A major way that insurers are becoming more nimble and cost-effective is by embracing Big Data, mobility, and the Cloud
Fact: The insurance industry is slow to innovate. The reason? There's really been no need to do so until very recently. For hundreds of years its business model has been very simple and most of the large firms relied on an army of independent agents to sell their products to the public.
Just as the Internet revolutionized retailing, it is making waves across the ever-traditional world of insurance. That's because companies both large and small, old and new, can reach the public directly through the Internet. If the right Information Technology powers direct consumer access, the result is a potent combination of efficiency and cost savings for otherwise staid companies.