Imagine a future suite of digitally native commercial insurance solutions. Solutions that leverage advanced technologies such as AI, IoT, blockchain, and cloud computing. Personalized solutions that provide real-time risk management and interoperate with a digital ecosystem of value-added services. That future isn’t too far away.
The Digital Commercial Insurance Platform of the Future and Its Components
The future platform will be a suite of interoperable commercial insurance solutions that leverage digital technologies to enable a value-creation paradigm of predicting, preventing, and mitigating risk. This suite includes multiple insurance products. The platform leverages advanced technologies and is supported by an IT infrastructure and architecture that enables seamless integration with value-added solutions in a larger digital ecosystem. Examples of potential products include:
Liability Insurance: That uses predictive analytics and risk assessment tools to help businesses identify potential liability risks, enabling insurers to provide personalized coverage and risk management strategies.
Workers’ Compensation Insurance: That enables far more efficient and personalized underwriting and claims processing and real-time risk monitoring to reduce the likelihood of workplace accidents and injuries.
Commercial Auto Insurance: That leverages IoT and telematics to enable real-time monitoring of driver behavior and vehicle maintenance, reducing the likelihood of accidents and claims.
Professional Liability Insurance: (Errors and Omissions): Advanced data analytics and risk assessment tools enable insurers to identify potential risks and provide customized coverage for professional services.
Directors and Officers Insurance: That helps businesses identify potential risks related to corporate governance, enabling insurers to provide customized coverage by leveraging predictive analytics and risk assessment tools.
Employment Practices Liability Insurance includes real-time monitoring of employment practices, reducing the likelihood of discrimination or harassment claims.
Cyber Liability Insurance: That provides proactive real-time protection against data breaches, cyber-attacks, and other digital threats.
Product Liability Insurance: That helps businesses detect, and identify potential product-related risks, enabling insurers to provide customized coverage by leveraging IoT, Social Media, and other data sources, as well as AI & machine learning.
Business Interruption Insurance: That uses real-time data, analytics, and risk assessment tools to enable customers and insurers to identify potential risks to business continuity, providing customized coverage for loss of income and extra expenses resulting from business interruptions.
Technical Requirements
Not surprisingly, delivering this digitally native suite of commercial insurance solutions requires capitalizing on a new generation of technology and architecture to support its advanced capabilities. The good news is that leading insurers are already incorporating many of them. Here are some key components that would be required:
Cloud Computing: The suite would require a cloud-based infrastructure to enable scalability, flexibility, and cost-effectiveness.
APIs and Microservices: APi’s would enable interoperability with other digital solutions, such as risk assessment tools, supply chain management systems, and cybersecurity platforms. A microservices architecture would enable the suite to be broken down into smaller, independent components, enabling greater flexibility and scalability.
Big Data Analytics: The suite would require advanced data analytics capabilities to analyze large volumes of data in real-time and identify potential risks.
AI & Machine Learning: Machine learning algorithms would enable customized coverage plans tailored to specific business needs and risks.
IoT Devices: IoT sensors and devices would enable real-time risk monitoring and provide valuable data for risk assessment.
Blockchain: Blockchain technology would enable transparent and secure transactions, automate policy issuance and claims processing, provide for smart contracts, and enhance trust.
Cybersecurity: Robust cybersecurity measures would be required to protect sensitive data and prevent cyber attacks.
Implementation Requirements
Several development and portfolio management methodologies would be required to implement digital commercial insurance solutions to ensure successful execution. Here are some methodologies that would be valuable:
Agile Development: Agile methodologies would enable rapid iteration and deployment of new features and solutions. This would allow the suite to be developed iteratively and flexibly, with continuous feedback from customers and stakeholders.
Design Thinking: Design thinking methodologies would enable a customer-centric approach to development, ensuring that solutions are tailored to customers’ needs.
Lean Startup: The lean startup methodology would enable the development of minimum viable products (MVPs) that can be quickly tested and validated, reducing the risk of failure.
DevOps: DevOps practices would enable collaboration between development and operations teams, enabling faster, more efficient deployments.
Portfolio Management: Portfolio management methodologies would enable the prioritization of projects based on their strategic value, enabling the development of a portfolio of solutions that meet the needs of customers and stakeholders.
Risk Management: Risk management methodologies would enable identifying and mitigating potential risks, ensuring that solutions are developed safely and securely.
Continuous Improvement: Continuous improvement methodologies would enable the ongoing improvement of solutions based on customer feedback and changing business needs.
The Cultural, Strategic, and Operational Changes
To successfully implement a suite of interoperable digital commercial insurance solutions that are part of a larger digital ecosystem, insurers must make significant cultural, strategic, and operational changes. Here are some key changes that would be required:
Customer-Centric Culture: Insurers must adopt a customer-centric culture, prioritizing customers’ needs and delivering personalized, real-time risk management solutions that meet their needs.
Platform Strategy: Insurers would need to develop a platform strategy that enables the integration of new digital solutions into the platform and processes it supports. This would require insurers to move away from a siloed product and solution approach and towards an interoperable platform approach.
Technology Adoption: Insurers would need to adopt new technologies and platforms that enable the development of advanced digital solutions, such as cloud computing, APIs, big data analytics, machine learning, and blockchain.
Collaborative Ecosystem: Insurers would need to embrace a collaborative ecosystem approach, working with other industry players, technology partners, and startups to create a broader digital ecosystem that delivers value-added solutions to customers.
Agile Mindset: Insurers need to adopt an agile mindset, embracing rapid iteration and continuous improvement to ensure that solutions are developed iteratively and flexibly, with continuous feedback from customers and stakeholders.
Risk Appetite: Insurers must adopt a risk-taking mindset, embracing experimentation and innovation to drive digital transformation and develop new business models.
Talent Management: Insurers would need to attract and retain top digital talent, enabling them to innovate and drive digital transformation within the organization.
Why This and Why Now
The insurance industry is going through a period of rapid digital transformation. With new technologies and changing customer expectations, insurers that fail to adopt digital-first strategies risk falling behind their competitors and becoming irrelevant in the marketplace. Here’s why it’s important to act now.
Meeting Customer Expectations: Today’s customers expect a seamless and personalized digital experience when interacting with insurers. Insurers that fail to meet these expectations risk losing customers to competitors that offer a better digital experience.
Cost Savings: Platform-based digital-first solutions can streamline and automate many aspects of the insurance value chain, leading to significant cost savings and operational efficiencies. Insurers that can reduce their costs can offer more competitive pricing to their customers.
Improved Risk Management: Digital-first solutions can enable insurers to predict better, prevent, and mitigate risks for their customers. This can lead to improved risk management and reduced losses, giving them a competitive advantage over insurers not offering such services.
Attracting Top Talent: By adopting digital-first strategies and developing platform-based solutions, insurers can attract and retain top digital talent. This can help drive innovation and digital transformation within the organization, leading to a competitive advantage in the marketplace.
Future-Proofing: As the insurance industry evolves and digital technologies become more prevalent, insurers that fail to adopt digital-first strategies and develop platform-based interoperable solutions risk falling behind and becoming irrelevant in the marketplace. By staying ahead of the curve and investing in digital transformation now, insurers can future-proof their organization and remain competitive.
Getting Left Behind: If insurance executives fail to embrace digital-first strategies and develop platform-based interoperable solutions, they risk being left behind by digital insurance leaders already delivering them.
Let’s get started.
Mike Connor, CEO, SVIA
revenue.
Your thoughts and comments are appreciated.
