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The future is here, it’s just not evenly distributed

Good quotes about technology tend to get more prescient the longer they stick around, and William Gibson’s  classic  “The future is here, it’s just not evenly distributed.” is just one of those.

We experience glimpses of the future every day, from glancing at your phone and seeing the travel time to your next meeting conveniently pop up, accounting for traffic, to having your progressive hearing loss reversed by using gene editing ear drops to having your car let you know it’s ready to take over the driving.

If you feel as though things are getting faster and new advances seem to be popping up at an alarming rate, it’s not that you’re getting old, it is actually accelerating.  We’re experiencing progress at an exponential rate.  You’re probably familiar with Moore’s law and the rate of growth of computing.

In today’s money $1000 will buy you the computing power of one mouse brain and it will fit in your smartphone, in 10 years that same $1000 will buy a human brain worth of computing power, and in 30 years it will buy all human brains.  Alongside this there is equivalent progress across other technologies – data transmission, imaging, hardware manufacturing, materials development and many others.  Through better models of collaboration enabled by better connectivity these effects multiply, further increasing the rate of change.

According the law of accelerated returns, the 21st century will feature 1,000 times the technological progress of the twentieth century.  Or to bring it closer to home, 40 years of progress at today's rate of progress will actually happen in 13 years.  It’s time to get used to ‘new’.

Disrupted by data

 Google, Facebook and Amazon will soon be able to offer insurance cheaper and more effectively than traditional insurance houses. Why? Because they have all the data.  Knowing more about you than your family they can price your risk more efficiently than any other entity. Those with the data are the ones with the power.   

The big question is how ready are you to act on the data you have?  Building your data warehouse is a good foundation, but how can you start creating value from your data?  Data is just the raw information.  See this example for a stop light.

Developing the right processes and technologies to enable your company to climb up the pyramid is a key competency.   The value that can be realised is clear. McKinsey identify that life insurers using social network and geographical data reduce fraud by up to 25 percent.

However, consumers are of course becoming more wary of the data captured by companies, they are starting to know more about us than even our most intimate of friends or family.  As the Guardian recently reported, a user received over 800 pages from Tinder when she asked for her data to be exported and sent to her.

Moving from Risk Mitigation to Risk Avoidance

One hypothesis is that as more data is collected and acted upon the role insurers will start to evolve into one that is closely aligned with the consumer’s own needs.  So rather than being a financial safety net, the job is actually helping the consumer avoid the eventually they are insuring against. By helping the consumer life a more healthy live or add sensors to their home  risk is reduced and therefore premiums can come down.  Great news for the consumer, but something that should start to trigger conversations about business models and future roles for those providing the insurance.

Expectations from the unreasonable consumer

Today’s consumer expectations are not set by past interactions with your brand, or even the conventions of your competitors – they are set by the very best experience they have ever had. If that’s paying with an image of their face at KFC or having all their whims catered for when they check into a hotel. This phenomenon is known as ‘transference’.  We bring expectations from one company to another and expect the same level of service, no matter what the underlying technical complexity may be.

This has big implications for the insurance industry, it’s been relatively insulated from disruption until recently, regulatory environments and complexity have kept the innovations to the sales and marketing end of the business, however we’re seeing new market entrants start to change the landscape.

When it comes to the to-do list, yes you need to get your forms under control,  yes you need easier to navigate policy definitions, yes you need to provide cover for your customer’s evolving needs - but these are the hygiene factors, get these right to even stay in the game. 

The real winners of the next economic revolution will be the ones who manage to ride the waves of evolving consumer and technology landscape to create new products and services that differentiate and disrupt.

My talk, The exponential age: People, technology and progress will look at the key social, technological and commercial trends that will matter and what they might mean for the insurance industry,

David Caygill is Managing Director at Iris Worldwide. He has led the development of award winning campaigns, new products and new services for brands such as UK National Lottery, Save the Children and MasterCard. David will be one of our Key Note Speakers at the ABI’s digital conference: Insurance in the digital world: cyber, data and technology – from hype to reality on 19th October. Find out more and book now. 

Last updated 02/10/2017