One minute AI will revolutionise insurance and another the IoT. And insurance covers a wide continuum of markets and products as Matteo Carbone describes so well in the linked article. He has a useful categorisation to apply.

"To date there are several types of approaches to mapping insurtech initiatives. I have developedmy own classification frameworkbased on six macro areas (Awareness, Choice, Purchase, Usage, IoT and peer-to-peer (P2P)). Insurance IoT, also known asconnected insurance, representsone of the most relevant and mature insurtech trends."

That is why insurtech is not about adopting new technologies and is about starting anew with all the different customers and their needs and reforming the processes, infrastructure, culture and organisation for the future, not the present.

"Connected is a key word Matteo Carbone uses.

  • Customers
    • Drivers
    • Nursing home residents
    • Hospital patients
    • Pilots
    • Pets
    • Athletes
    • The list goes on.....
  • Devices
    • Plant and machinery
    • Wearables
    • Phones & Tablets
  • Cars and trucks, planes, ships and coming autonomous vehicles
  • Homes, and devices in homes
  • Nursing homes, care homes
  • Hospitals
  • The list goes on...

Digital transformation is the change to core systems of record and digital platforms required. By the very nature and scope of the challenging change this covers a full continuum of technology.

To take a small example in automotive and insurance. 

Telematics helps explain the content of a road traffic accident; driver behaviour, vehicle movements and speed.

Streaming Videotech means claimants can help insurers assess damage and often authorise a claim very speedily. This can obviate the need for engineers/inspectors to visit unless the damage is complex.

Better still if every photo, video plus available metadata is time & date stamped, encrypted & made part of a single digital record of the whole claim from beginning to end.

It makes sense to apply this to the supply chain as well to speed up quotes, authorisation to proceed and manage the process to repair, replace or scrap and pay. Relevant information shared (securely) to make and speed up better decisions.

A next step will be to apply machine learning/AI to identify damaged panels and parts and create a bill of materials, the costs and automate auction process to chose a body shop to repair.

There arenumerous relevant technologiesthat come to mind, including: the cloud, the Internet of Things (IoT), big data and advanced analytics, quantum computing, artificial intelligence, autonomous agents, drones, blockchain, virtual reality, self-driving cars.

All the time, of course, complying with consumer rights & legislation to ensure they get a fair deal.

This is for a very specific part of the insurance business but already shows the complexity of the challenge. A small number of insurance carriers demonstrate leadership, vision and a brave & innovative strategy to harvest the digital dividend.

Laggards may pass away into history and a middle group of carriers, brokers and intermediaries are betwixt and between. 

"If insurance companies do not take advantage of this opportunity, some other player will. For example, Metromile is an insurtech startup and a digital distributor that has created a telematics auto insurance policy with an insurance company that played the role of underwriter." Matteo Carbone

Will today's insurance carriers just end up as underwriters? The answer lies with them and whilst "software is eating the world" the main diners are in fact the insurance executives with the power to reimagine and reform the world of insurance