Emerging Technologies in Insurance
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19 December 2011Benjamin Moreland
Insurance companies have always been risk averse to quickly adopting new technologies. It is not uncommon for technologies to be mature in other industries and still be low on the adoption scale within insurers. However, as the rate of change has rapidly accelerated over the last decade, carriers are in the uncomfortable position of having to determine much faster which new technologies to invest in, and which to continue to watch. Unfortunately, the window to watch has dramatically shrunk before an insurer is playing catch up and has lost market opportunities. Celent recently hosted a Creative Disruption workshop which focused on how insurers can more quickly adopt and leverage new approaches to solving existing problems, basically changing the behavior in thinking about, solving and implementing new solutions to existing and novel opportunities. It was highly recommended that insurers include in the their project portfolio projects that included some of the less mature, emerging technologies, as well as the changing roles and organization structures that would be needed to gain the maximum benefit of the new paradigm shift. (See "Stirring the Creative Disruptive Pot" http://22.214.171.124/insurance/2011/11/stirring-the-creative-disruption-pot/) In order to help Insurers better understand which emerging technologies have the greatest potential, it recently released its inaugural Emerging Insurance Technologies report (http://www.celent.com/reports/emerging-insurance-technologies) which provides a snapshot of the adoption rate of 24 technologies that insurers are implementing or evaluating. It breaks down the emerging technologies into 4 quadrants, namely, Growth and Retention, Risk and Compliance, Efficiency and Expense Control and Claims Indemnity Control. While many of these technologies will have impact on several of these business areas, each has a primary impact on one of them. In addition to the Emerging Technology Report, Celent has also just published "Big Insurance Data: Drawing Lessons from Amazon, Google, and Facebook" (http://www.celent.com/reports/big-insurance-data-drawing-lessons-amazon-google-and-facebook), which is one of the fast growing technologies and potentially largest impact to insurers as the amount of data continues to grow exponentially. As more data is machine generated, as opposed to human generated data, through mobile appliances, third party data, web logs, etc., the ability to mine the data and find useful business insights becomes very expensive and/or time prohibitive. This report looks at three leading big data users, Amazon, Google and Facebook, to provide learnings and benefits to carriers through their successful use of these technologies, such as MapReduce and Hadoop. Celent claims that the game has changed and the old ways of looking at issues and opportunities will not work going forward for insurance technologies. The rate of change has progressed to uncomfortable levels, forcing carriers to react faster than they are used to. In addition, the technology changes are affecting roles, such as more configuration changes and setups to applications being done by the business instead of mostly or totally by IT and affecting organizational structures as well. Knowledge is the greatest asset going forward as it has always been - it's just the use of it is on hyperdrive.