In part one of a two-part Tech Trends in Insurance report, WRIN.tv speaks with Bill Pieroni, President & CEO of ACORD, about the disruptive effect data and technology has had on the insurance industry. He notes that more recently, there are a number of issues that are increasing the importance of technology and data usage today.
Mr. Pieroni says forces outside the insurance industry are driving a desire for more consumer-friendly interactions with carriers. This “consumerization” is influencing the way products and services will be delivered. In addition, he suggests that carrier investments in “big data” must be accompanied by an increase in IT expenditures to integrate analytics into the insurance value chain.
Mr. Pieroni sees a need for insurers to be integrated electronically into the insurance ecosystem in order to have seamless interaction with agents/brokers, reinsurers, suppliers. Ultimately, he believes there will be a “digitization” of the entire value chain, including products, underwriting, pricing, services, claims, etc.
A recent study by ACORD assessed “digital maturity “among insurers. Mr. Pieroni says that only 40% have fully “digitized” their value chain. As early-adopters of technology, he notes that there are a lot of legacy issues for insurers to deal with before making the leap to digital technologies. While acknowledging the difficulties in making the commitment, ACORD discovered that shareholder returns for carriers who invested in technology were above industry norms.
Looking ahead, Mr. Pieroni believes that by 2020, most major insurance countries around the world will see increases in digitization from 20 percent to 80 percent of the market. And while niche carriers do not have to digitize, those that do not will be competing in just 20 percent of the market for personal lines or commercial lines insurance.
In part two of our discussion with the ACORD CEO, Mr. Pieroni discusses developments in the InsureTech arena as well as tomorrow’s insurance value chain.