(Las Vegas panorama. Photo credit: A.R. O’Donnell.)
No doubt about it. InsureTech Connect, held this week in Las Vegas, has become the biggest and most influential tech event in the insurance industry. The entire ecosystem of insurance is well represented: insurers, InsurTech startups, incumbent tech companies, venture capitalists, industry associations, consultants—you name it. They are here. The event is a good representation of the InsurTech movement and industry transformation overall. Everyone in attendance is energized and senses that this is an industry in motion. After a long slumber, insurance is transforming big time. The questions are: Why is this happening and why now? How long will this continue? And most importantly, where will it all lead? I’ll tackle these questions one by one, writing this blog on the run in the midst of meetings, receptions, dinners, and the overall hectic pace of the event.
Why is this happening and why now?
One could cite many things that are driving InsurTech. Advances in emerging tech, increased customer demands, competitive pressures, and a new wave of senior executives taking the reins (among other things) are all valid reasons. But I prefer to sum it up into two ideas: digital demand and latent demand. Insurance has been on a digital journey for decades, but now, every company in every industry is pressured to have a comprehensive digital strategy. Simply put, the only way to respond to the challenges and opportunities of a fast-paced world is to become a digital enterprise. The second reason is the latency state. This has been coming for a long time. Many insurers have been strengthening the core, establishing foundational capabilities for mobile, and rethinking the business from the customer perspective. Now that many of them have completed their foundational infrastructure transformations, or expect to complete them in the next couple of years, the industry is really ready to capitalize on the opportunities of the digital connected world.
How long will InsurTech continue?
I am tempted to say forever—although not always the way it is today. The InsurTech movement, in its current form, is likely to continue for at least the next 2-3 years for one simple reason: there is still a lot of money set aside for InsurTech investment. And new funds seem to be announced every day. While it’s true that the big money is going to a small set of leaders, everyone is still keeping an eye open for that next wave of winners. The money, coupled with the impetus to transform, will fuel this movement for quite a while.
Where will this all lead?
I do wish, sometimes, that I had a crystal ball. The possibilities are so intriguing. One thing I am certain about is that this industry will look very different in ten years, perhaps even in five years at the rate we are going. I am very optimistic that the industry will not only survive, but will thrive, extending into new coverage areas and new services, playing a substantial role in evolving new ecosystems like smart homes/property, connected vehicles, smart healthcare, and more. Early examples include the revolution underway in marine insurance. Who would have guessed? Global shipping titan Maersk is at the center of multiple partnerships that are building solutions based on IoT, blockchain, and AI, which are collectively poised to transform that entire line of business. I expect this story to be played out over and over again in every line of business and in many forms.
It sure is an exciting time to be in insurance. I hope that one result will be that the industry attracts the best and the brightest young (and older) minds to participate in the transformation journey. Judging from the ITC2018 crowd, that is already starting to happen.
One last thing. If I could make another wish, I’d wish the event organizers would remove that pesky “e” from InsureTech, and spell it like everyone else.