The science, or perhaps the art, of predicting the future path of technology has come a long way since Andy Grove, founder of Intel grumpily declared “The idea of a personal communicator in every pocket is nothing more than a pipe dream fuelled by greed”. There are plenty of business books and media articles by self-proclaimed and even acclaimed experts, making spectacularly wrong assertions about where technology is heading. For a more recent example of this, look no further than the finance pundits who denounced cryptocurrencies as a silly fad.

The practice of prediction has moved out of the realms of entertaining musings into main-stream business strategy. Futurists have been sounding the alarm bells for decades, warning executives that the pace of business past, has switched into high gear and is roaring down the track at the disruptive speed of blur.

One of the many industries that has long been in the sights of futurists, is asset insurance. The broker-based insurance industry has been a late bloomer in terms of technology adoption. By its nature, it is document and regulation heavy, and brokers have been weighed down by the burden of administration. The dual challenge of stricter regulation and the growth of online insurers means that broking professionals are being forced to consider new ways to grow and manage their businesses.

While many brokers are keen to explore automation technology, making the switch is not a linear decision. There are a myriad of scenarios that they must consider when adopting new technology, not least of which is how it would affect relationships with their clients.

Agencies like FinanzRitter, an Insurtech start-up, are addressing these limitations in the industry, and they have an interesting proposition for brokers. They offer a cloud-based management platform with a high degree of automation of time-consuming functions. They estimate that the adoption of this system will reduce the workload by a staggering 90%, freeing brokers to grow their businesses and service their customers. A high-profile seven figure investment by Odysseus Investments last year, should enhance the agency’s ability to provide further innovation in this space.

The switch from an old school IT system to a new AI-driven, fully digital platform, can be a mine field. The much-publicised TSB Bank IT fail in 2018, made them a poster child for what can happen when the switch falters. However, notwithstanding the potential pitfalls of a tech migration (these risks are becoming smaller as the industry learns from past mistakes) we must ask the question, do brokers really have a choice, or is it a do or die scenario?

Christophe Reech, the CEO of Reech Corporations Group says, “Yes, clients now expect a digital experience, and the efficiency and cost savings that it delivers. From a broker perspective, automation will improve profits in their core business. Happy well-serviced customers result in higher retention, and this is a key KPI in a fickle and commoditised market.”

He says that innovation is not just about processes, it will transform the experience of the customer. The shift away from traditional underwriting currently based on age, sex or location, to behaviour tracking, means that clients will not foot the bill for the bad eggs in the basket (read social scoring).

Adapting to digitisation in the insurance industry isn’t cut and dried; demographics, technology, social dynamics, environment, and legal considerations must be scrutinised for businesses to adapt and react appropriately.

There are still many scenarios and debates around digitised insurance, some conversations seem more suited to a scene in a Sci Fi movie than around a board room table.  It seems like a lifetime ago that the U.S. state of Nevada passed a law permitting driverless cars. In March 2012, the first license was issued to a Toyota Prius, modified with Google’s experimental driverless technology. The car completed over 300,000 accident-free miles. In September 2012 Florida and California followed suit. The next step was smart highways, equipped with wireless technology, fibre optics, sensors, cameras, GPS, and electronic signs communicating directly with the vehicles. These technologies were touted to potentially eliminate motor accidents; perhaps heralding the demise of the motor insurance industry. Ten years down the track, the conversation has not changed much, and we still don’t have digitised super-highways and a network of autonomous cars. However, as driverless technology is still on the cards, a new narrative has now emerged – will we need an entirely new form of insurance for “computer malfunctions”. Consider the scenario where a driverless car drives off a bridge due to a technical glitch, who would foot the bill?

And what about household theft insurance? Security systems are becoming increasingly sophisticated, face recognition and biometrics are almost old news. If an intruder enters your home, a system could potentially alert you, send the intruder’s image to the police, carry out an instant check on a centralised system and have the perpetrator off the streets via a driverless police car and an armed droid/drone in minutes. No more burglary claims.

Aging, digital and home-based workforces, environmental change, personalisation, technology, and let’s throw in a pandemic for good measure – means that that all organisations will have to sit on the bow of their boats with telescopes the size of the SKA to develop strategies for managing future demands. It could be, that the top job of the future is forecasting and analysing the future. Big data analytics is going to play a massive role here, not only for underwriting insurance policies but for predicting trends across all businesses.

While the world has never been static, the pace of change now is unprecedented. Professionals who will thrive in this environment are those who recognise that they are not alone on the roller coaster and pull in the professionals to help. The industries that help their clients get a good grip on the ride, are the ones who will be pulling the biggest carriages.

The digitisation of the insurance industry is a tiny part of a massive digital/AI shift. Perhaps AI and automation will allow the broker to come full circle. With less administrative duties they may become more than mere purveyors of products; they may return to a more personal relationship with their clients. The words “value add” may take on a whole new meaning as advisors are freed to help their clients achieve financial wellness, and this could build bonds and relationships that will last a lifetime.