Navigating the Fourth Industrial Revolution - 5 Actions for Insurers [Part 3 of series]
Embracing a growth mindset and understanding how new disruptive technologies could materially impact our industry are among the best strategies to prepare for the opportunities and challenges of the Fourth Industrial Revolution. I highlighted some of the new disruptive technologies in Part 1 and Part 2 of this blog series.
At Gen Re, we prepare for potential headwinds and change by critically analyzing the trends and technology - and their potential impact on our clients. We also explore developing new products and partnerships that will allow carriers to replace premium lost.
We advise clients to routinely update their companies’ boards on how artificial intelligence (AI) advancements and collaborative robots are changing their clients’ industries and whether technology is replacing or complementing workplace activities.
What are some critical actions for evaluating AI and developing technologies?
- Separate the hype from reality.
- The amount of information can be overwhelming for any CEO or board, so consider getting assistance from Gen Re and other trusted advisors in tracking developments. We work closely with clients to examine and evaluate which disruptive technologies are most likely to affect their core businesses, and which might provide opportunities for them.
- Focus on the core practices, processes, products and people at your customer organizations.
- Your policyholders’ employees can help you analyze which industries in their portfolio are most vulnerable to automation within the next five years. If a critical assessment reveals that a significant part is susceptible to obsolescence, Gen Re will examine whether product development, market expansion or new partnerships can provide a buffer for anticipated premium or market share loss.
- Don’t overlook your own underwriting and claim operations.
- Can you use AI to improve your own underwriting results or identify creeping catastrophic claims? Having a work culture that encourages a growth mindset and embraces new technology is essential. We can assist clients with evaluating opportunities and how their standards and practices can be affected by AI and other disruptive technologies.
- Critically track and examine the legal and regulatory issues that can slow the adoption of AI, robotics and automation.
- While AI technology continues moving forward, many legal and ethical questions surrounding this technology remain unanswered. Driverless technology provides one pressing example for insurers. As Warren Buffett commented at the 2017 Berkshire Hathaway Annual Meeting, “If driverless cars became pervasive, it would only be because they were safer,” which would mean that “the overall economic cost of auto-related losses had gone down and that would drive down the premiums" for insurance companies. We do not know when driverless technology will be widely adopted, but we know that now is the time to prepare for its impact on Auto, Umbrella and Workers’ Comp portfolios.
- Don’t wait
- It is not too soon to start the journey toward understanding the impact and possibilities of AI, robotics and automation. Ignoring the trend can be costly regardless of what lines of insurance you write.
Gen Re understands what these technological advances mean to your company and your portfolio. Together, we can ensure that you are knowledgeable and prepared.