Artificial intelligence, the Internet of Things and Blockchain will bring profound and far-reaching change to the insurance industry. But even as we focus on these transformative technologies, and their likely impact, it is critical to remember that insurance remains a service industry and that people will continue to be the most important element for success.
There is no doubt that some jobs will be lost; others will change significantly, and extensive retraining may be required. New jobs will be created across the organization, creating a challenge for recruiters—they will be competing in a fiercely contested talent marketplace. Managing all this change, and creating a new corporate culture that relishes constant novelty and opportunity, will be essential to success.
Artificial intelligence is changing the entire industry
Insurers worldwide are starting to deploy AI to reduce costs and improve services. Some are already using robotic process automation software to improve their operational efficiency.
Within the next decade, AI will change the fundamental nature of customer interactions in financial services, making some customer service departments almost fully virtualized. These systems will leverage several technologies to be able to have advanced conversations (either by chat or speech) with humans and answer highly complex inquiries.
Working in tandem with such intelligent machines, the scope of what the insurance workforce can achieve becomes almost limitless. To realize this vision, leaders need to create corporate cultures in which technology empowers their people to evolve, adapt and drive change.
Tailoring insurance products with the IoT
The IoT will bring the customer experience to the forefront, open the door to an entirely new class of risk management services, and also reduce payouts for insurance companies.
To cope with changes spurred by the IoT, insurers will need become more innovative, leaner and nimbler. They will need to create new operating models and workforce structures to leverage dynamic new business models. The IoT will also force the organization to adapt from a standalone entity to one that can function optimally within an ecosystem of partners.
Just as importantly, insurers will need to change their corporate cultures and their workforces. Customer experience skills will become even more critical, given that the customer experience will occur much more frequently, will be more diverse (ranging across the spectrum of risk protection) and will be more personalized.
The arrival of Blockchain
As the technology matures, Blockchain’s applications will extend far beyond payments, and will cover many other purposes that today require sensitive information to be held centrally. In insurance, there is potential for Blockchain to improve risk-recording, the storage and sharing of documents, and management of identities and personal information.
The ability to recruit, train and support the right people to develop and run Blockchain and its associated infrastructure is critical. Creative solutions will be needed for employers to understand exactly what skills they require, and to go about securing and retaining them.
The impact of Blockchain will be felt further afield than just payments, and professionals in other areas must also be up-skilled—the legal, regulatory, risk and capital implications should be clearly understood.
Moving ahead in uncertainty
The following steps will help insurers leverage these three technologies for a competitive advantage:
Build an organization-wide understanding of the processes that can leverage the new technologies.
Set up an internal team to evaluate them, determine which are most relevant, and predict their impact.
Start to implement them where they have the greatest potential to make a difference. Conducting internal experiments and quick proofs of concept to build understanding while keeping investment low.
The aim is to determine whether these technologies can drive the expected benefits and can be integrated with existing infrastructures. One of the biggest challenges will be to proactively address the human side of the equation.