Tag Archives: Sureify

The Death of Core Systems

Insurance is overweight and unhealthy. For too long, the insurance industry has accepted that it is OK for at least a third of customer’s money to be spent on admin, overheads, sales and marketing. Insurance CEOs have been announcing operational efficiency programs for years, yet the percentage of premium left for the risk pool hasn’t really changed. Thank goodness for the insurtech digital implementation strategy for insurers!

Hampered by legacy technology, large workforces and cumbersome business processes, insurance is an inefficient business. But that’s changing! Insurtech is now on the corporate agenda for all insurers who wish to be around in the next five to 10 years — which means embracing digital ways of working in an age where speed of change is the defining characteristic.

For this month’s “Insurtech Insights,” Rick Huckstep explores the subject of the insurtech digital implementation strategy and the impact of digital platforms as an alternative to core systems implementations.

Why now for insurtech?

The insurance industry has always been a technology user, so why is there now all this fuss over and attention about insurtech digital implementation? IMHO, insurance is going through a massive catch-up phase. I call this a rapid evolution, rather than use “disruption.”

Nonetheless, this is about digital implementation for insurers, who have failed to keep pace with technology since the mid-’90s and the birth of the internet. You only have to consider the iPhone, already a decade old, and incumbent insurers still appear clumsy when going “mobile.”

For decades, software vendors and systems integrators were the source of technology insight and innovation. Now they find themselves increasingly irrelevant in the digital age — even more so with the emergence of insurtech. That is why many are scrambling around looking for ways to engage with the insurtech ecosystem; if anyone is going to be disrupted by insurtech, it will be them!

See also: Let’s Keep ‘Digital’ in Perspective  

The problem is that software vendors have focused on providing all-encompassing core systems at massive expense and demand on company resources. Often, by the time these large IT implementations are finished, they are already a legacy system. It is no wonder that so much of the IT budget is spent on keeping the lights on, leaving little for internal innovation and value creation.

These core insurance systems are like giant aircraft carriers. They’ve got massive capability and scale and are deep and rich functionally, are generalist and are built to last (well, at least 17 years, which is about the average for a policy admin system.) They are designed and built to do just about everything! They are also very expensive, take ages to commission and are difficult to adapt to external, unforeseen changes.

Whereas insurtech’s core systems are like the latest generation of robotic armed patrol boats — agile, automated, cheaper, have a shorter cycle times to commission and are task-specific.

The demise of core systems

In the traditional software licensing model (the way legacy systems are sold), the insurer buys a license to use the software. For this, the insurer typically pays a large one-off, upfront fee. Then, the insurer pays an annual maintenance charge that is based on a percentage of this fee (in the 15% to 25% range).

Added to this is the cost of implementation. This is where the systems integrators come in, because not all software vendors provide the services needed to implement and configure the new system.

These implementations become large IT-led projects that are measured in years and tens, if not hundreds, of millions of dollars. And they’re big decisions that the insurer is going to have to live with for several decades! That is why the average time to make a buying decision is also measured in years.

Meanwhile, the product and sales teams are frustrated by the IT department because it sees customer opportunities and competitive threats in a constantly moving market and is powerless to respond. IT has become a constraint — not the enabler it was always meant to be. Speed-to-market has become an oxymoron!

The rise of the platform

By contrast, those involved with insurtech are digital natives, mobile in nature and cloud-savvy. The entrepreneurs and founders are born out of the post-iPhone world. For the insurtechs, it’s all about building a flexible and agile tech platform. There’s little need for an in-house IT department when the insurer can buy a service on a pay-as-you go basis.

The insurtech digital implementation can be measured in months and thousands of dollars (instead of years and millions). Speed-to-market is the defining characteristic of these tech-enabled platforms.

In the old-world model, if an insurer wanted to launch a new product or enter a new market, they’d have IT on the critical path, defining the timescale for the launch.

Partnering is the new route to market

In the insurtech world, it’s a different story. And the incumbent insurers have cottoned on to the new way of working: partneringIn this model, the insurer picks insurtech platforms — rather than deploying their own core systems — when launching new products. The insurer focuses on insurance. The insurtech focuses on tech. A leader in this model is Munich Re Digital Partners. Its approach is to provide its own underwriting platform as the back-end engine while the insurtech partner provides the product and customer engagement. Either way, this insurtech digital implementation strategy offers insurers speed, cost and customer advantages.

The result is a significantly less expensive implementation approach with a quicker actual speed to market.

Let me give you an example. Let’s say Insurer A wants to launch a health product in a new territory. Its insurtech digital implementation strategy is to partner with, for example, Sureify.

If you don’t know Sureify, here’s what I wrote about them last year under the heading “Sureify, the Salesforce.com of insurance engagement.” In it, I described the company as follows:

“Sureify is an insurance technology platform that allows insurers to digitally acquire, engage and up-sell with prospective and current policyholders. Part of the platform capabilities includes health, disability and life insurance products built around IoT devices to enable dynamic premium modeling. It is a platform that emphasizes web and mobile distribution channels with multiple engagement possibilities. And it is offered as a white-label platform for the carriers where they define the underwriting questions, policy terms, risk and pricing tables using a plug-and-play approach.” 

Digitalization is the redirection of the company to the customer

To get a industry perspective on the subject of digital implementation, who better to give me an opinion than the well-qualified Martin Pluschke, head of digitalization at NuernbergerVersicherung.

We met up recently at a RiskMinds conference in Amsterdam, where we were both speaking. Martin and I first met during Startupbootcamp’s original insurtech cohort in 2015. I was mentoring, and he was the executive in residence as part of the Munich Re/Ergo support for the program. Martin has spent 25 years in the insurance industry, but he also has several years working with insurtech start-ups at SBC and Axel Springer Plug & Play Accelerator.

I asked him for his POV on digital implementation. He said:

“Digitalization is the redirection of the company to the customer.

This means that we have to look at the whole value-chain — from product management, contract closing to claims processing. Everything we do has to be from the customer’s mindset. It’s a totally new way of thinking for the insurer. There is nothing else, it is all about the customer.”

This is 21st century insurtech thinking inside one of Germany’s oldest life insurers. Formed in 1884, Nurnberger has plenty of experience adapting to challenges and changing customer behavior. The company is no stranger to technology, either. Any life insurer that has been around this long will have seen massive technology change — from tabulation to the introduction of programmable computing in the 1950s to the internet age and now to 21st century digitalization.

Moving from passive risk taker to active risk manager

Martin had something to say about this, as well:

“The new model for insurance is tech with insurance. Insurers must change from being a passive risk taker, where they take a bet and wait for a claim. They win when no claim is made.

“With the use of tech, insurers can have a new relationship with customers. They become an active risk manager. In this model, the insurer will add value through additional services to the customer, such as giving customers advice on ways to manage their risk or offering them specific support and solutions when they have a problem.”

What Martin is describing is one of the key insurtech trends of engagement. This is where the relationship with the insurer is not a once a year occurrence. Instead, the insurer finds ways to continually engage with its customer through the use of tech, such as wearables, telematics and IoT. The result is enhanced customer loyalty where value replaces price as the key buying criteria.

See also: Digital’ Needs a Personal Touch  

Executive mindset is critical to insurtech digital implementation 

I asked Martin how well prepared he thinks are insurers for digital implementation? He said:

“It starts with the very top. The executive mindset is critical because they can not measure the outcome of their decisions based on a business case or ROI anymore.

Never try, never learn! That is the way insurers have to think now. That is the way startups and entrepreneurs think and act. But that is very difficult for insurers who are risk-averse. Which is why the strategic commitment to digital implementation can only come from the top layer of management.

In my view, this is no longer optional for insurers. The only way to stay in the market is to become totally digital. It is a matter of survival.”

I totally agree with Martin on this point. When we look back at today, the winners and losers will be defined by those that did and did not embrace an insurtech digital implementation strategy. The likes of Munich Re, Swiss Re, Aviva and others are all showing a clear intent towards embracing insurtech digital implementation through partnerships and a customer centric digital strategy. They will be among the winners. 

Ditching the legacy

The only way insurers can fully embrace an insurtech digital implementation strategy is to take a clean-sheet approach. This means ditching the legacy!

IMHO, we will start to see insurers separate out their current operations, books of business and all the legacy that goes with it. They will no longer try and re-platform, modernize, migrate their existing core systems or redirect precious resources at another operational efficiency program to take out huge swaths of costs. At the end of the day, all these programs do is shift cost from one place to another. They seldom drive truly permanent and radical change.

The insurance digital implementation strategy will be to run down investments in legacy operations and start new business ventures based on insurtech partnerships. And companies will put the customer at the very heart of their thinking.

That will be the insurtech legacy!

InsurTech: Golden Opportunity to Innovate

The insurance industry has remained much the same for more than 100 years, but over the past decade it has seen a number of exciting innovations and new business models.

As part of PwC’s Future of Insurance initiative, we’ve interviewed numerous industry executives and have identified six key business opportunities (illustrated below) that incumbents need to take advantage of as they try to meet customer needs while improving core insurance functions.

See Also: Key to understanding InsurTech

Because FinTech offers substantial promise to take advantage of emerging opportunities, funding for start-ups is surging. Increased funding activity not only demonstrates venture capitalist investors’ interest but also indicates how incumbents may leverage FinTech to address their specific business challenges.

The insurance-specific branch of FinTech, InsurTech, is emerging as a game-changing opportunity for insurers to innovate, improve the relevance of their offerings and grow. InsurTech, has seen funding in line with FinTech investment overall, and we expect investments to increase as new players and investors enter the space.

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As Figures 2 and 3 show, activity around early-stage InsurTech companies has generated considerable buzz. Moreover, experienced insurance executives have joined start-ups, including Insureon and Lemonade, to help them develop new types of products and services, like small business aggregators and peer-to-peer insurance models. All of this indicates that investors and the industry are eager to get on board with early stage start-ups to meet the six areas of opportunity we illustrate above and describe in detail as follows:

1) Meet changing customer needs with new offerings – Customer now expect personalized insurance solutions. One size simply does not fit all any more. Usage-based models are partially addressing these expectations, but the sharing economy also is challenging existing, more traditional insurance products. New players are able work from a clean slate and leverage a variety of available resources to fill market gaps. For example:

  • Metromile, a start-up, has developed a customer- (rather than risk-) centric value proposition for occasional drivers. It offers a low base rate and then charges a few cents per mile driven. Metromile also offers an app that provides personalized driving, navigation and diagnostic tips, and can even remind drivers where they parked. Furthermore, the company has entered into a partnership with Uber that allows drivers to switch from personal to Uber insurance.
  • USAA has invested $24 million in Automatic Labs, a telematics platform that claims it will “connect your car to your life” and provides a full suite of integrated apps (including wearables).
  • In the life sector, Sureify has developed a platform that allows insurers to underwrite life insurance based on lifestyle data inputs they obtain from wearables.
  • In the peer-to-peer space, Lemonade claims to be the world’s first peer-to-peer carrier, but other companies like Guevara and InsPeer have been exploring variations of the same model. Bought by Many, a start-up that uses social platforms in its go-to-market strategy, helps individuals join or even create affinity groups, as well as find insurance solutions for their specific needs across different product lines. Of note, leading Chinese insurer Ping An has partnered with Bought by Many to create personalized travel insurance by leveraging social media data.

Some large insurers have decided to develop start-ups in-house. For example:

  • MassMutual is using internal resources to build Haven, a new, stand-alone, direct-to-consumer business.

2) Enhance interaction and build trusted relationships – Established carriers have to manage increasing customer expectations and provide seamless service despite their large and complex organizations. In contrast, new market entrants are not burdened with large, entrenched bureaucracies and typically can more easily provide a seamless customer experience – often using not just new technology but new service concepts.

For example, self-directed robo-advisers are convenient, 24/7 advisers that provide ready access to information that can empower consumer decisions about financial planning and investment management. And investors have taken notice:

  • Northwestern Mutual acquired Learnvest, a leading robo-adviser with an estimated value of more than $250 million.
  • Other robo-advisers, such as FutureAdvisor, have been part of important deals, while others (including Betterment, Personal Capital and Wealthfront) have raised funds above $100 million.

Moreover, disintermediation and the emergence of new online channels is occurring in all lines of business:

  • The Chicago-based start-up Insureon has created an aggregator that specializes in micro and small businesses. It taps into existing profit pools that personal and commercial carriers are trying to reach.
  • To become a B2C player in the digital small business market, ACE Group has recently taken a 24% ($57.5 million) stake in Coverhound, which enables customers to directly compare coverage options and pricing from various carriers.

3) Augment existing capabilities and reach with strategic relationships – The insurance industry historically has included intermediaries, service providers and reinsurers. In most cases, the carrier has led the business relationship because of its retail market position and scale. However, companies increasingly are peers. Accordingly, joint ventures and partnerships are a good way to augment existing capabilities and establish symbiotic relationships. For example:

  • BIMA Mobile has partnered with mobile telecom companies to provide life insurance solutions to uninsured segments in less developed countries. It offers simple life, personal accident and hospitalization insurance products on a pay-as-you-go (PAYG) basis for a set time period (usually just a few months). Policyholders can obtain a pre-paid card and activate and manage their policy from a mobile phone.
  • AXA has acquired an 8% stake in Africa Internet Group for EUR75 million, opening opportunities for the company in unpenetrated markets.

New B2B2C entrants also are helping forge mutually beneficial relationships:

  • Zenefits was one of the first to create channels to connect insurers, brokers, employers and employees.
  • Flock, which features broker managed benefits where plans can be designed to cover a range of options from enrollment to life events, offers what it says are “absolutely free” HR and benefits solutions.

4) Leverage existing data and analytics to generate risk insights – Established insurers traditionally have had the advantage over prospective newcomers of being able to leverage many years of detailed risk data. However, data – and new types of it – now can be captured in real-time and is available from external sources. As a result, there are new market entrants that have the ability to generate meaningful risk insights in very specific areas.

  • Several Internet of Things (IoT) companies, including Mnubo, provide analytics that generate insights from sensor-based data and additional external data sources like telematics and real-time weather observation. The promise of the better risk assessment and management resulting from this model is likely to appeal to personal and commercial carriers.
  • Facilitating this real-time data collection are drone start-ups, including Airphrame and Airware. Drones provide the ability to analyze risk with embedded sensors and image analytics. They also can operate in remote areas where it has traditionally been difficult for humans to tread, thereby saving time and increasing efficiency. In fact, American Family’s venture capital arm is investing in drone technology to explore new approaches to access and capture risk data.
  • In the life space, P4 Medicine (Predictive Preventive, Personalized and Participatory) offers insurers better insights that they can apply to life and disability underwriting. Lumiata is offering the potential for better predictive health capabilities, while Neurosky is developing next-generation wearable sensors that can detect ECGs, stress levels and even brain waves.

5) Use new approaches to underwriting risk and predicting loss – Protection-based models are shifting to more sophisticated preventive models that facilitate loss mitigation in all insurance segments. Sensors and related data analytics can identify unsafe driving, industrial equipment failure, impending health problems and more. More deterministic models, like the ones that now exist for crop insurance, are starting to emerge, and new entrants are offering both risk prevention (not just loss protection) and a more service-oriented delivery model. For example:

  • The South Africa-based company Discovery has a partnership with Human Longevity. They are teaming to offer whole Exome, whole genome and cancer genome sequencing, to clients in South Africa and the UK. Gene sequencing can identify risks before they manifest themselves as problems, but also raises ethical questions. It has the potential to completely disrupt life underwriting and places certain responsibility on the company to help customers manage genetic risks (while being careful about actually mandating lifestyle choices). But, on the whole, managing genetic risks in advance can benefit both the end-consumer and the insurer because, if they work together, they can better manage or even avoid long-term health problems and associated expenses.
  • On the automotive side, Nauto, a San Francisco- based company, offers a system that provides visual context and telematics with actionable information about driving behavior, including distracted driving. The company claims that its system can help insurers design new pricing strategies and pinpoint areas of premium leakage that they otherwise may not notice.

See Also: InsurTech Trends to Watch For in 2016

6) Enable the business with sophisticated operational capabilities – Effective core systems enable insurers to operate at a large scale. Because of cost, establishing these systems has traditionally been a barrier to market entry. However, access to cloud-based core solutions has facilitated scalability and flexibility. Developments like this, combined with new developments like robotics and automation, have provided new market entrants compelling differentiators.

As just one example, underwriting automation is now available in life and commercial lines (notably for small and medium businesses). Some carriers have adopted simplified processes and “Jet” underwriting, in which they leverage external data sources to expedite approval. This has resulted from the availability of risk insights that support new underwriting approaches. Several companies are offering to optimize and augment processes via improved collaboration, artificial intelligence and more. For instance:

  • OutsideIQ offers artificial intelligence solutions via an as-a-service underwriting and claims workbench that uses big data to address complex risk-based problems.
  • In addition, automating claims can improve efficiency and also effectively assess losses. Tyche offers a solution that uses analytics to help clients estimate the value of legal claims.

Implications: Think like a disruptor, act like a startup

In a time when societal changes, technological developments and empowered customers are changing the nature of the insurance business, established insurers need to determine how InsurTech fits in their strategies. The table shows the various approaches insurers are taking.

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More specifically, insurers are:

  • Exploring and discovering – Savvy incumbents are actively monitoring new trends and innovations. Some of them are even establishing a presence in innovation hotspots (e.g., Silicon Valley) where they can learn about the latest developments directly and in real time.

Action Item: Plan an InsurTech immersion session for senior management. This should be an effective eye opener and facilitate sharing of relevant insights on desired InsurTech solutions. Subsequently, FinTech analyst platforms can keep management up to date on the latest developments and market entrants.

  • Partnering to develop solutions – Exploration should lead to the development of potential use cases that address specific business challenges. Incumbents can partner with start-ups to build pilots to test in the market.

Action Item: Select a few key business challenges, identify possible solutions and find potential partners. A design environment (“sandbox”) will help boost creativity and also provide tools and resources for designing and fast prototyping potential solutions. This approach also can help establish the baseline and approach to building future InsurTech solutions.

  • Contributing to InsurTech’s growth and development – Venture capital and incubator programs play an important role strategically directing key innovation efforts. Established insurers can play an active role by clearly identifying areas of need and opportunity and encouraging/working with start-ups to develop appropriate solutions.

Action Item: Define a strategy to direct startups’ focus on specific problems, especially those that otherwise might not be addressed in the short term. Incumbents should consider start-up programs such as incubators, mechanisms to fund companies and strategic acquisitions. (N.B.: It is vitally important to protect intellectual capital when imparting industry knowledge to start-ups.)

  • Developing new products and services – Being active in InsurTech can help incumbents discover emerging coverage needs and risks that require new insurance products and services. Accordingly, they can refine – and even redefine – product portfolio strategy. This will result in the design of new risk models tailored to underserved and emerging markets.

Action Item: Take a close look at emerging technologies and social trends that could be business opportunities to define product strategy, determine required capabilities and develop a plan to build a portfolio and seize market opportunities. FinTech has become a buzzword, but whichever way the FinTech/InsurTech market itself goes, the reality underpinning it is not a passing fad. Insurers that are actively involved with InsurTech in any of the ways we describe above stand to gain, whichever way the market moves. They can use their capital and understanding of customers and the market to both inspire and exploit innovative technologies and correspondingly grow their business.

What Limelight Shows on InsurTech’s Future

Limelight Health, the winner of our start-up Showcase at our first Insurance Disrupted | Silicon Valley, gives a sense of what’s to come with innovation in insurance.

Limelight Health has a product called QuotePad, which is one of the first real-time, mobile, all-in-one quoting platforms for health insurance and benefits professionals. (The others highlighted at the Showcase are RigGroupHubroostJumpstart RecoveryZenehomeSureify.)

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Jason Andrew, CEO of Limelight, says what his company is doing is a harbinger of even bigger changes: “We are witnessing one of the largest transformations in the history of a multitrillion-dollar industry. New technology is changing the game for the entire insurance ecosystem. Quicker, more seamless data integration is changing the insurance process, from the way consumers research and purchase insurance to how claims are underwritten. As a result, companies large and small are sprinting to keep up with the demand for agile and integrated technology platforms that can harness this growing data volume and extract real value from it.  The largest carriers are now paying attention to big data, spending more money on research and bringing on data scientists to analyze and shape the future of insurance. “

As the industry moves from a legacy framework to a series of more connected systems with intelligent logic built in, all parties involved in the selling and decision-making process will be allowed to spend more time executing decisions and much less time on the administrative work that is a large and protracted part of the process today.

Andrew says, “For the health insurance market, which is fragmented with a lot of outdated systems that don’t connect or communicate easily, and where redundancy often leads to a high probability of error, we see this as being where QuotePad will make a significant impact on the insurance industry.”

Limelight Health was born in February 2014. Before that, the insurance technology boom had not fully launched, and it took several years of pitching, partnering and persistence to gain the attention of an industry that now supports the cause. Prior to 2014, no one was really interested in investing in insurance.

What we now know as #insuretech and #fintech was not the sexy vertical it is today. And we’re just getting started.

If you’re in the industry you are probably keenly aware of some of the changes that are coming, but not all. Please consider joining us for future Insurance Disrupted conferences, with our start-up Showcases. The next will be held March 22-23 in Silicon Valley. ITL readers receive a 15% discount here.

Organizer and host of Insurance Disrupted Conference: Silicon Valley Insurance Accelerator – SVIA

Innovation Partner: Insurance Thought Leadership

Conference sponsors: Aflac, Munich RE, Captricity, Zendrive, XL Innovate, Saama Technologies, CRC Insurance Brokers, Novarica

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Insurance Disrupted: Silicon Valley’s Map

With $5 trillion in premiums, an incredibly low level of customer satisfaction, aging infrastructures, an analytically based, high-volume business model and a “wait until we have to” approach to innovation, insurance is now fully in the sights of the most disruptively innovative engine on the planet, Silicon Valley. The tipping point for insurance is here.

More than 75 digitally born companies in Silicon Valley, including Google and Apple, are redefining the rules and the infrastructure of the insurance industry.

Inside the Insurance Tipping Point – Silicon Valley | 2016

It’s one thing to listen to all of the analysts talk about the digitization of insurance and the disruptive changes it will bring. It’s quite another to immerse yourself in the amazing array of companies, technologies and trends driving those changes. This post is the first of a series that will give you an inside look at the visions, culture and disruptive innovation accelerating the digital tipping point for insurance and the opportunities that creates for companies bold enough to become part of it. (Join us at #insdisrupt.)

Venture firms are catalysts for much of Silicon Valley’s innovation, and insurance has their attention. Frank Chen of Andreessen Horowitz sees software as rewriting the insurance industry, AXA insurance has established an investment and innovation presence here. Others, including Lightspeed VenturesRibbit Capital and AutoTech Ventures, are investing in data and analytics, new insurance distribution plays and other technologies that will change the shape of insurance.

New business models: MetromileZenefitsStride HealthCollective HealthClimate Corp., Trov and Sureify, are using technologies to redefine and personalize insurance and the experience customers have with it.

Rise of the Digital Ecosystem – Expanding the Boundaries of Insurance

Digital ecosystems are innovation catalysts and accelerators with power to reshape industry value chains and the world economy. They dramatically expand the boundaries within which insurance can create value for customers and increase the corners from which new competitors can emerge.

Silicon Valley is home to companies acutely aware of how to establish themselves as a dominant and disruptive platform within digital ecosystems. That includes Google, which is investing heavily in the automobile space with Google Compare and self-driving vehicles and has acquired Nest as an anchor in the P&C/smart homes market. Fitbit is already establishing health insurance partnerships. And let’s not forget Apple. The Apple Watch already has insurance-related partners. Apple has clear plans for the smart home market and has recently launched AutoPlay, its anchor entry into the auto market. There are rumors that Apple plans to develop an iCar. And that’s just what we know about.

There are a host of other companies placing digital ecosystem bets in Silicon Valley, as well: GE, which is driving the Industrial Internet of Things; Parstream, with an analytic platform built for IoT; the IoT consortiumJawboneEvidation HealthMisfit Wearablesicontrol NetworkGM and its advanced technology labcarvi; and DriveFactor, now part of CCC Information Services.

Then there are the robotics companies, including 3D robotics, the RoboBrain project at Stanford University and Silicon Valley Robotics, an association of makers.

Customer Engagement and Experience – New Digital Rules, New Digital Playbook.

When your customer satisfaction and trust is one of the lowest in the world and companies like Apple and Google enter your market place, it’s really time to pay attention. There is a customer value-creation and design led innovation culture in the valley unrivaled in the world, and the technology to back it up. Companies like Genesys, and Vlocity are working on perfecting the omni channel expereince. Hearsaysocial and, declara, are working on next gen social media to help customers and the insurance industry create better relationships. Many of the next generation of insurance products will be context aware, opening the door to new ways of reaching and supporting customers. Companies like mCube and Ejenta, are working to provide sensor based insight and the analytics to act on it. TrunomiBeyond the Ark, and DataSkill via cognitive intelligence are developing new innovative ways to use data & analytics to better understand and engage customers. Lifestyle based insurance models are being launched like Adventure Adovcates and Givesurance, And some of digital marketing automation’s most innovative new players like Marketo, and even Oracle’s Eloqua are rewriting and enabling a new digital generation of marketing best practices.

Big Data and Analytics – Integrated Strategies for the New “Digital” Insurance Company

The techno buzz says big data and analytics are going to affect every business and every business operation. When you are a data- and analytics-driven industry like insurance that deals with massive amounts of policies and transactions, that buzz isn’t hype, it’s a promise.

The thing about big data and analytics is that when they are used in operational silos, they provide a tactical advantage. But when a common interoperable vision and roadmap are established, analytics create a huge strategic advantage. That knowledge and the capability to act on it is built into the DNA of “born digital” entries into the insurance market like Google.

The number of companies working on big data and analytics within the valley is staggering. We have already discussed a few in the Customer Engagement section above. Here are a few more, In the area of risk: RMS is building its stable of talent in the big data spaceActian is delivering lightning-fast Hadoop analytics; Metabiota is providing epidemic disease threat assessments; and Orbital Insights is providing geo-based image analysis. In the areas of claims and fraud, PalantirScoreDataTyche and SAS are adding powerful capabilities for insurance. Improved operational effectiveness is being delivered by Saama Technology, with an integrated insurance analytics suite; by Prevedere, with data-driven predictive analytics; by Volumetrix, with people analytics; and by Sparkling Logic, which helps drive faster and more effective decision making.

Insurance Digitized | Next Generation Core Systems

With insurance boundaries expanding, integration with digital ecosystems, increasing reliance on analytics and the demand for personalized and contextualized outcome- and services-based insurance models, core systems will have huge new sets of requirements placed on them. The requirement for interoperability between systems and data and analytics will grow dramatically.

Companies like GuidewireISCS and SAP are building a new generation of cloud-based systems. Scoredata and Pokitdoc are bringing new capabilities to claims. SplunkSymantec and FireEye are addressing emergent cyber risks. And companies like Automation EverywhereOcculus RiffSuitable Technologies and Humanyze are enabling the digitally blended and augmented workforce.

The latest investment wave includes artificial intelligence, deep learning and machine learning, which core systems will need to incorporate.

Surviving the Tipping Point – Becoming One of the Disruptive Leaders

This is a small sampling of the technologies, trends and companies just within Silicon Valley that are shaping the digital future of insurance. The changes these will drive are massive, and they are only the tip of the iceberg.

An Insurance Tech meetup group open to all the insurance-related companies within Silicon Valley was just announced by Guillaume Cabrere, CEO of AXA Labs, and already has 64 members. For established companies to survive the tipping point and thrive on the other side of it requires more than handing “digital transformation” off to the CIO or marketing team. Success requires a C-Suite that has become an integral part of the community and culture building the digital generation of insurance companies.

For technology companies and next-generation insurance companies, success requires building partnerships with established and emerging players.

This blog series is designed to inform and accelerate that dialog and partnering formation. It will include a series of interviews with disruptive leaders from industry and Silicon Valley. If you or your company would like to be a part of that series, please let me know.

Join us for the next Insurance Disrupted Conference – March 22-23, 2016 l Silicon Valley

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ITL readers receive a 15% discount when registering here.