Because the strategic value of technologies to insurers is maturing, there is a shift in how research looks at transformational technology.
During the past decade, SMA has conducted a survey to learn how insurers are viewing emerging technology. This year’s technology survey reflects industry changes, because, in the grand scheme of things, some of the featured technologies are no longer emerging. And because the strategic value of the technologies to insurers is maturing, there is a shift in how the research looks at transformational technology.
At the end of the day, technology should be about transforming the business and driving better outcomes. The survey results reveal the degree to which strategies are being generated. Are there pilots in the works? What percentage of the activities are implementations? Where do commercial insurers believe impact is at a business-area level? And, probably everyone’s favorite, are insurers investing?
This year’s recently published survey showed some predictable results – AI is the insurance industry darling, and commercial lines is no exception. But there were also some surprises – IoT activity fell off from 2018. But why? The reasons highlighted in the report are important – it isn’t lack of value. SMA analysis and experience reveals that there are seven technologies that are supporting commercial lines transformational activity to one degree or another:
- AI/Machine Learning
- Robotic Process Automation (RPA)
- New User Interaction (UI)
- Internet of Things
- Virtual Payments
- Wearable Devices
To be very clear, not every insurer and every product line places the same value on each of the transformational technologies. Commercial lines are complex, and insurers are adopting where business outcomes are improved and the technology is within the parameters of strategic plans. The trick for many commercial lines insurers will be to pay close attention to shifts in business outcomes and respond quickly. Unlike past technology cycles, competitive advantage tied to technology adoption is emerging quickly.
See also: Winning in Small Commercial Lines
For the skeptics about commercial lines adopting transformative technology, I hope you are a bit more positive. For those curious, or even downright happy, I hope learning curves went up, and you are challenged to understand how the seven transformative technologies can drive better outcomes within your own company.
For more information, check out SMA’s research report, Transformational Technologies in P&C Commercial Lines: Insurer Progress, Plans, and Projections