Library: Willis Towers Watson – Quarterly insurtech briefing Q1 2021
Executive summary :
Throughout most of recent human history, the adoption of new technologies and innovative ideas has been as much a question of good societal timing as it has been the availability of said technologies and ideas.
Generally speaking, ideas and technologies have to be acceptable to the community of which they will one day be a part if they are to succeed in being inducted (Thomas Edison’s hydrogen battery springs to mind). In order to expand the production-possibility frontier, therefore, a society needs to be willing to embrace any such technology that can, at least in part, facilitate this transformation as much as its facilitation relies on the technology being available in the first place.
Results deliver consensus
Community-wide acceptance of anything transformative, or at least accelerated evolutionarily, is rarely instantaneous. It requires evidence-driven results and a legitimate period of “bedding in.”
In very rare cases, an outside force with such an innovative/ technological advantage can be a true “disrupter” and will not require the approval of the incumbent community. But even in those cases, the outsiders in question usually have the support of the state or the consuming class. Why write such a trite observation?
Because this issue has probably been the single most important barrier to entry for InsurTechs wanting to be a part of the (re)insurance industry. This is evidenced by the fact that the types of technology that are now making industry headlines are not exactly new, but widespread willingness to engage and adopt is now growing at an unprecedented rate.
COVID-19: the catalyst for change
The past 12 months of insurtech-related activity has shown us this. True technological ‘disruption’ (i.e., innovation) almost never begins with a single invention; rather, it begins when a community emerges to support it.
COVID-19, more than any other issue, has rapidly accelerated the ice-breaking process that was already well under way in our industry. One of the greatest contributions that InsurTech start- ups, as a whole, have made to our industry is to consistently extol the virtues of technology relative to the (re)insurance industry.
Over the past five years, industry press has been inundated with new technologically enabled firms that are looking to work with our industry to support the ready adoption of technology to achieve (for the most part) a common goal: the better matching of risk with capital while improving end consumer experience and lowering operating expenses.
COVID-19 has helped this narrative accelerate and demonstrably illustrate the results that are now being achieved at scale.
As the ice is being broken, and more trust and confidence is being garnered, the flow of fresh water into our industry is gathering momentum.
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