Next Wave

This article was originally published in Carly’s monthly column in AM Best Review in December 2017.

Looking back on 2017, a Jack Welch quote comes to mind: “If the rate of change on the outside exceeds the rate of change on the inside, the end is near.”

This year saw many changes that affected the insurance industry: carriers and/or managing general agents built by insurtech firms, more experimentation with autonomous vehicles, a strong push to privatize flood insurance, new threats in the cyber realm, and the expansion of the sharing economy. It’s easy to reflect on these events with Welch’s words echoing in your head and feel concerned about the industry’s ability to keep up. We can focus on the challenge of legacy systems and the perceived bureaucracy of large carriers. But if you step back for a minute and consider what the industry is actively doing, I would still bet on our success. The following are examples of the industry’s attempts to keep up or outpace change.

Innovation centers: Many carriers have developed departments that are future focused. They are contemplating changes in the marketplace that will affect their business and developing services and products that are complementary to their existing models.

Reorganizations and realignments: Everywhere you look, carriers are realigning to focus on their customers. Whether this means creating more specialized teams or merging departments that have historically been separate, the end goal is to provide better service. Carriers and agencies making these changes are responding to the needs of the end user in ways that seem intentional and purposeful.

Partnering with insurtech firms: Carriers and agencies are more open than they have been in the past to use the expertise of insurtech firms to solve legacy issues with technological advances that may have been leveraged outside of our industry for years. Many of the innovation centers that I mentioned explore partnerships with these types of firms. The use of data and especially visualized data in the underwriting space from firms like DataCubes and Intellect SEEC are particularly encouraging.

These steps are the beginning of the adaptation to the 21st-century world. To succeed, each of us must work toward understanding the pace of change and potentially outpacing it in places that make sense. The slogan—“If you see something, say something”—should be adapted in all underwriting and customer-focused organizations. Our success will depend on our ability to identify and adapt to trends that are coming down the line. Can we get ahead of some of them instead of being reactive? We should all be thinking about the impact of automation and artificial intelligence on the workforce of the future. If we want to develop products that are valuable, we must think about how cyber risk will evolve before it happens. Finally, we should consider what services would complement traditional products, as diversification seems increasingly necessary in the workers’ compensation and auto insurance lines.

I am confident that each of us can respond to the new marketplace and bring ideas, innovation, and creativity to our industry even though the general public may view us as stodgy and behind the times. The people I know and communicate regularly with give me confidence that we are equipped to tackle everything 2018 and beyond brings our way.

About Carly Burnham

Carly Burnham began her insurance career in 2004 as an office assistant at an agency in her hometown of Duluth, MN. She got licensed as a producer while working at that agency and progressed to serve as an office manager. Working in the agency is how she fell in love with the industry. She saw firsthand the good that insurance consumers experienced by having the proper protection. When Carly moved to Des Moines in 2010, she decided to commit to the industry, and she completed her CPCU in one year finishing it in 2012 and attending commencement in New Orleans. She completed her MBA at Iowa State University in 2014. During this time, she and Tony founded a Gen Y Associate Resource Group at Nationwide in Des Moines. After they had both left Nationwide, Tony recruited Carly to co-author and manage InsNerds.com. She has the difficult task of keeping his constant flow of crazy ideas focused and helping to flesh them out into useful articles. Carly enjoys sharing knowledge and ideas about the future of the industry and finds the website a good outlet for this passion. Carly is involved in the the CPCU Society Underwriting Interest Group. She also writes "Next Wave" a monthly column in the "Perspectives" section of Best's Review.

1 thought on “Next Wave”

  1. Hi Carly,

    I love Jack Welch’s quote. He is right on. Rate of change outside faster than the rate of change inside spells doom!!

    This has always been the case. Now it is even more so. Today’s change is understandable but it is difficult to integrate into the overall corporate process. Knowing the detail is one thing.

    But it is very important to have overall insight in how this technology or that technology fit into your corporate plan. It is important to use the new technology in a planned mode. Otherwise you will be history.

    There are some people who are very good at determining how to use the blast of new technologies and they know how to develop a corporate systems plan that reflects those technologies. Those people who have that skill, please make it known that you exist. Those companies who do not have that skill hire people who have that skill.

    I have seen this happen over and over. You need a skilled planner to effect the skyrocketing plethora of technology that is on the table right now otherwise you are toast.

    If you do this it will help the rate of change inside your company to catch up the he rate of change outside your company. Maybe you will survive. Jack Welch is right on about this!!

    Thanks,

    Reply

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