I saw this report on the IBM site the other day - Insurance 2020: Innovating beyond old models. It had some interesting predictions in it, especially since it took a longer time horizon than is typical in these kinds of reports. Many of the points made in the report led me to thoughts of decision automation, rules and analytics (as so many things do).
- Targeting and personalization will be key and customer-centricity will become the norm. This means using the information you have about someone, and additional data you can find out about them or infer, to target them both in terms of marketing (something insurers are starting to do) but also in terms of product design and pricing. This will dramatically increase the number of "tiers" needed and will force automation of risk and pricing calculations as people simply aren't good at handling that much complexity.
- Technology can only virtualize the value chain (as noted in the report) if decisions are automated too. If different channels respond differently (using manual decision-making) or if value-chains are interrupted by waits for manual decisions then this is just not going to work.Likewise outsourced elements must be outsourced in a way that allows different companies to use those outsourced services slightly differently.
- Products must become more flexible and more dynamic, making manual review or intervention ever more difficult. For example, the use of sensor data driving real-time or shorter term policies will make automated decisioning imperative.
- Regulation is becoming more layered and more complex and this is not going to change. The need therefore for business rules with their great ability to be logged and audited to show compliance with regulation will grow.
And lastly a "hello" to Jamie Bisker, now at IBM, who wrote the report.