Other parts of this series:
Commercial insurance broking is ripe for transformation in the face of a new generation of ever-evolving customers, technological innovations, and unprecedented volumes of data. Add to that the disruption from digitally savvy insurtech startups, and it becomes clear that selecting the right technologies for adoption is key for not only success but also for survival of brokers’ businesses.
The insurance industry spends billions of dollars a year seeking to streamline back-office processes, enhance the services and products offered, and create new value. Given the high stakes, brokers should evaluate their investment choices wisely.
So, how can we separate the hype or a passing fad from what’s a technological necessity in the digital age? Luckily, there is a technology maturity guide that may help.
Each year, the not-for-profit research corporation MITRE independently assesses a particular technology for readiness. Technology Readiness Assessment (TRA), originally developed by NASA in the 1970s and 1980s, is a metrics-based process that analyzes the maturity of, and the risk associated with, critical technologies.
According to MITRE, “assessing the maturity of a particular technology involves determining its readiness for operations across a spectrum of environments with a final objective of transitioning it to the user. Application to an acquisition program also includes determining the fitness of a particular technology to meet the customer’s requirements and desired outcome for operations.”
MITRE’s technology maturity s-curve includes the following categories:
- New or Emerging Technology: Has not reached the tipping point
- Improving Technology: In the development stage
- Mature Technology: Second tipping point before the curve turns down
- Aging Technology: When the downward tail begins
In Accenture’s blockchain “Broker of the Future” [marketo-rtp-id id=”rtp-form-id” image=”” description=”” title=”report” registration_page_link=”https://insuranceblog.accenture.com/pov/the-broker-of-the-future-pov.pdf”], we adapted the s-curve to commercial broker technologies:
The first category in the s-curve is emerging technologies, which brokers should consider adopting in the next five to 10 years:
- Internet of Things (IoT) authentication, which helps collect, manage and analyze data from policy holders;
- Digital security includes cyber-security and privacy measures;
- Smart advisors are virtual personal assistants and intelligent machines;
- Automated data classification refers to tools that enable identifying, tracking and classification of sensitive, scalable data;
- Blockchain technologies or mutual distributed ledgers are based on the cryptocurrency technology, most well known for Bitcoin. For insurers, blockchain-enabled smart contracts can securely compute and record transactions in a distributed ledger allowing for automatic verification and collective agreement.
Cutting-edge insurers are already taking advantage of these new tools, so it is time to follow their lead.
Coming up next, we will take a look at improving technologies in insurance, which brokers should consider adopting in the next two to five years.