IBM Explores Innovation for Insurance Industry

http://www-935.ibm.com/services/at/bcs/pdf/br-cs-crm-insurance-2020.pdf

This is a very interesting and thought provoking analysis. Here is its main stance:


"In spite of previous examples, the familiar message still needs repeating: the insurance industry does not have a technology problem- it has problems in the use of technology due to culture, internal politics, and the engrained aspects of human nature that resist change. Disruptive forces will come to the various demographic groups int he form of cultural change, technological advancements and geopolitical realities, such as changes in the environment, the globalization of commerce and world health issues. We believe that, instead of working hard to improve current processes, insurers should be preparing for a changing future".

This article takes the stance that insurers mistake technological innovation for what is really optimization. As a result, companies create a point-solution mentality. Interestingly, IBM considers this way of operation to have caused insurers to treat the symptoms of persistent problems while ignoring primary causes. They say that insurers need to start thinking more holistically. "The focus that a large number of carriers place on modernizing their core processing capabilities and infrastructure provides a great start to achieving the flexibility needed to correct operational problems. These modern approaches have at their center architectures that prevent the creation of systems that are no better than the legacy ones that they replace. The use of industry standards and maturing IT concepts such as service-oriented architecture are essential to breaking from the past and enabling support for business and technological innovation".

Personally, I can be accused of some of the faults that IBM points out in terms of the industry's way of thinking about current technology and using it to solve certain problems but not necessarily thinking about the big or whole picture. I think it will be challenging for the industry to accept the sort of change that IBM suggests. I agree with the fact that collaboration possibly from the source of suppliers, peers, competitors, employees and other stakeholders is the key to innovation. A great suggestion is also engaging and learning from other industries is critical. Over time it will be interesting to see if any of these suggestions are adopted, what the industry gains from continuing to take more risk with technology and possibly changing its reputation as an unsophisticated industry to a leader in technological innovation.