Insurtech and investments in technology need to be more than just “innovation theatre” or “feel good activities” as the industry could be facing its Kodak moment, an expert has said.
With data and expertise at the feet of insurance incumbents, the industry cannot ignore changes in customer behaviours, or else traditional firms could go the way of the forgotten camera company.
Brent Lehmann, general manager affinity & commercial – Australasia, at Willis Towers Watson, said that for those still on the fence about insurtech and the impact it could have on the industry, it boils down to two simple choices.
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“You either want to win in this environment or you don’t want to die, it is as simple as that,” Lehmann told Insurance Business. “Either you embrace the journey that insurtech can deliver and understand what it can do to take your business to another level, or you dismiss it as a passing fad or phase.
“I think those that dismiss it as a passing phase might come to a harsh realisation that it is not a passing phase at all.”
Lehmann noted that while the level of insurtech investment globally has been increasing, and Australia will look to follow suit over the coming years, talk about the subject currently outweighs action.
In Australia, Lehmann said that
IAG is currently leading the pack in terms of its investment in technology, with other large insurers set to follow suit. For brokers, Lehmann noted that the developments in technology are equally as concerning as they are for insurers, as currently there is “not enough commitment to innovation from within the broking landscape.”
“The biggest challenge our industry has here, and it is a widely known fact, is that corporate innovation is known to be 10 times harder because of the all the encumbrances that slow down large organisations,” Lehmann continued. “Insurance, in particular, is such a conservative industry that it could be even worse than 10 times harder.”
Lehmann said that technology will continue to be a vital issue for the industry as generational shifts become more apparent. With Gen X more likely to utilise and seek out technology than previous generations, and with younger generations moving into more senior roles, the trend lines are set.
“The expectation they have in terms of the relationship that they want with the insurance industry is very different to the last generation,” Lehmann continued. “That alone is going to help drive the acceleration of this insurtech phenomenon.”
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