Dan Canham, Head of Accelerator, Technology and Innovation, TAL Australia
Five years ago, ‘digital disruption’ was a term to be feared or revered. Many organizations grappled with how to embrace the digital age. We wanted to emerge through this time of rapid change as a leader, not a follower. Some succeeded, many failed. New businesses were born and others, less nimble and agile, are still finding their way.
The digital age saw organizations shifting budgets and realigning staff. The end goal was to innovate. Those at the forefront of change built agile working teams, started up innovation labs and incubators and set big audacious goals. Senior Executives returning from their latest trip to Silicon Valley would come back energized from what they had seen. Chiefs focused on the latest technologies, it was all Blue Sky thinking and many were convinced that if their company embraced the digital age they would see their business rocket into the future, success assured.
Then, in boardrooms across the country, return on investment hit the agenda. Management saw money being invested heavily in big data, innovation and technology, but were struggling to see the results of their investments. The insurance industry, ripe for disruption, was no different.
If we are being honest, the processes and customer experiences that underpin the insurance industry have seen little change during the digital revolution. Despite the constant hunger for innovation, the potential to transform big data to profitable, desirable customer solutions has stymied. Complex engagement, broken trust, redundant intermediaries, and limited access made the industry vulnerable to competition.
Digital native companies like Netflix and Amazon place artificial intelligence (AI)
at the heart of what they do. Their data intelligence is used to not only understand their customers but know them so well, through algorithms, suggest a product or service to their customer that the customer didn’t even know they needed.
It is the infusion of data and AI with emotional intelligence that will see the best in the business step ahead of the crowd
These companies are constantly pushing the boundaries and shifting their businesses into vertical and adjacent opportunities. In the process, driving growth and proving the return on investment that Boards desire.
Today innovation and technology buzz words are rife. Go to any innovation and technology conference and you will hear discussions around ‘platforms, blockchain, and APIs’. Innovation and technology is made to sound simple, but we shouldn’t be fooled. The reality is that incumbent insurance IT systems, are at worst redundant and at best, not fit to handle the requirements thrust upon them.
Infusing Big Data with Emotional Intelligence
It isn’t all doom and gloom. An insurance company’s greatest strength is its customer data. Our businesses have the ability, with the right people and the right teams, to access and leverage this data in the most powerful way. We need to empower our teams to understand big data, and more importantly engage and interact with customers like never before. It is the infusion of data and AI with emotional intelligence that will see the best in the business step ahead of the crowd.
Today, data is primarily helping insurance companies to manage pricing and assess risk. The next trend we can expect to see is using data and AI to create products and services beyond a business’ core offering. It will be the organizations that use data, combined with customer insights, to think beyond what their customers use today and predict their needs and actions in the future. New offerings will begin to emerge, and traditional insurance products and processes will be one small component of the complete customer offering.
Leveraging Startups, Solving Problems
There will be instances when businesses need to work with the systems they have, and that is ok. There will also be opportunities to leverage partnerships and the technology of startups to rapidly propel insurance companies into new areas of business growth. It is those moments and opportunities we need to embrace. As an incumbent, think of partnering with startups to enhance and solving elements of the business value chain. They are not the entire solution but they can have a pivotal role in supporting the solution.
Cybersecurity, a Challenge that Constantly Changes
While the fusion of technology and human emotional intelligence has the ability to drive new growth, equally important is cyber security. Organizations need to realize that cybersecurity is a business issue, not only an IT issue. Cyberattacks are an evolving danger to organizations, employees, and consumers. They may be designed to access or destroy sensitive data or extort money. Leaning into the dangers and developing a strategy around cyber security is critical to sustainability and trust between all stakeholders.