Thinking the future

What if something happens to my property? Or perhaps I accidentally and unexpectedly harm a third party? How much do I invest in the present for a guaranteed secure future? More critically, do my specific insurance policies match my lifestyle of tomorrow? Unanswered insurance questions and contingency plans for family and loved ones are a topic most people do not confront with sufficient regularity. It is very prudent and worthwhile to check whether the specific contracts and plans you have enrolled in for the coming years still are still practical and remain optimized for your own living conditions. After all, the future often arrives substantially faster than you think.

What is applicable and relevant to the policyholders, of course, additionally applies to the entity providing the insurance. Looking ahead to many possible futures remains their core competence of an insurance firm. For this reason, it is critical for companies to nurture a focus on future-oriented developments. These companies need to review and audit both their organizational structure and functionality, remain flexible, and embrace new technologies in order to position themselves ideally for the future.

Regarding the use of digital technologies, there is a great deal to absorb and interpret because so much is occurring at a rapid pace within the industry. Questions arise: Is the corporate structure of the insurance sustainable? Which specific technical solutions could be utilized? In which manner can the latest technological and operational discoveries be optimally integrated? Is your own company capable of connecting with its digital partners? And regarding the customer experience, how can the customer interfaces be digitally expanded in the next update?

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Many insurance companies are recognizing how a detailed and informed response to these urgent issues is critical in the face of rapid and profound digital developments. Increasingly, companies are confronted with technical innovations that could shake-up and revolutionize an entire industry, however, willingness to address these changes is often relatively slow and insubstantial. Some of the new solutions emerging for insurers and the insured soon may very well make life much easier.

One example of an emerging field relevant to insurance business is blockchain technology. This technology promises to be a tool of great utility in the near future. Blockchain is a distributed database that allows transactions of any sort to be performed without a centralized core data administrator. The critical difference when compared to how common software programs function is that all involved parties in a transaction access a consistent data set. More specifically applied to insurance applications, terms of insurance, customer information, and the funds themselves are stored in the blockchain – and the structure of the transaction is such that each new set of data or information is instantly matched and compared with the previous set and checked for consistency. This systemically creates a robust and powerful trustworthiness to all blockchain transactions. No outside party must rely on mistake-prone processing to fulfil its obligations if the constraints and values of the relationship are already firmly defined in the blockchain code. The most critical quality of employing blockchain systems is that it provides transparency, and through the decentralized processing, establishes a measurable trust. Marketing vehicles, and massive public image and communications efforts such as the famous Mr. Kaiser, who for decades has helped to position a German insurance company as credible, will be be rendered obsolete and a thing of the past.

It is clear that insurers can no longer ignore or avoid referring to the misunderstood topic of “Big Data”, certainly not if they want to remain competitive and sustainable as viable businesses. Until now, however, a great deal of leaders in the industry as a whole have been rather cautious about this topic. This hesitance to adapt and reticence regarding this coming technological future is not going unnoticed. Even Angela Merkel has already warned that digitization in medicine and health care must be profoundly accelerated.

This restraint and reluctance to act swiftly can be traced back to an overall conservative attitude in the insurance industry. Finally, there is a weighty obligation concerning the large amount of highly personal data utilized in this sector to be handled very carefully and responsibly, even when this data promises a huge gain in proprietary knowledge. For this exact reason, many companies still tend to develop the software they use to maintain control over their sensitive data. This is an understandable choice, but it comes at a cost. Because the development of proprietary software takes a great deal time and resources, and is developed for specifically-structured insurance companies, the end product is often not so adaptive and carries the risk of being overtaken by technological change.

For start-ups such as ONE, here is a great opportunity. Thinking for the future digitally is already embedded in the DNA of insurance. While the old hands of the industry are still working to assess the needed changes to their companies, they are also struggling to comprehend what opportunities are emerging in the future and thinking about what these new concepts mean. One Insurance, however, is already working on concrete solutions for the future. The home insurance programs and liability insurance programs which can be completed online and managed by app, are just the first step.