Insurance of the future

From self-driving cars to face-scanning phones, technology is encroaching into the most mundane parts of everyday life — and the insurance industry is seeing change arriving.
We asked four leaders in the industry to reflect on their company’s role during this transformation, and what customers can expect from the industry in the future. They are: Amy Friedrich, president for U.S. Insurance Solutions with Principal Financial Group; Paul Hlivko, vice president and chief technology officer, Wellmark Blue Cross and Blue Shield; Jason Gross, vice president of strategy and business transformation, EMC Insurance Companies; and Casey Decker, chief information officer, Farm Bureau Financial Services.

What’s the most significant information technology project your company is working
on currently?
Amy Friedrich: We have several information technology initiatives that are designed to drive our top objective — to offer solutions that grow and protect assets of individuals and businesses — and help them live their best lives. The most significant information technologies that we are working on include customer engagement as well as customer and employee data protection. I am particularly excited about the next-generation customer experience we are creating for our insurance and retirement customers.

Paul Hlivko: We have several large-scale transformations underway that will make it easier for our members to interact with us. We’re nearing the completion of a modernized core system program that delivers new technology and processes for membership, product and claims operations. We are also well into a multiyear program to modernize our technology organization and adopt forward-leaning, innovative solutions — including cloud adoption. In addition, we continue to invest in our digital business transformation, which includes a revolutionized technology platform, new digital solutions for our customers and open APIs to deliver a more frictionless business.

Jason Gross: EMC Insurance Companies, like many carriers, is transitioning from mainframe legacy systems for our core systems to the latest programming languages, platforms and approaches. We are on a multiyear IT modernization journey to address this transition and bring fresh perspectives to areas like our agent and policyholder experience.

Casey Decker: We’re a multiline company, so we have significant projects from both a life and a property-casualty insurance standpoint. On the life insurance side, we’re in the middle of migrating our policy administration to an all-new, more efficient system called FAST, which will enable us to bring new products more quickly to market. On the property-casualty side, we have Driveology, which is a usage-based insurance program that gives good drivers the discounts they deserve and a better customer experience. We are also partnering with lowa State University on an intern program. The interns will be paired with some of our employees to form a standing team who will explore and leverage new technologies. This summer the team will be working on a new mobile application.

What emerging technology on the horizon are you most excited about?
AF: I’m excited about several new technologies on the horizon, one being the migration from simple data analytics to advanced data analytics to artificial intelligence. Data is fueling our digital business strategies. We are building considerable talent focused on data (including hiring our first chief data officer, Tej Dhawan) and are leveraging crowdsourcing to develop data-driven algorithms (e.g., with the University of Iowa Tippie School of Business).

PH: Artificial Intelligence, specifically machine learning, has the potential to transform our member experience and evolve our business model. On the horizon, we see the uses of data-driven learning systems to advance our customer experiences, optimize processes and scale the value we can deliver.

JG: It is difficult to pick just one. EMC has already invested in drones, the tnternet of things, wearables, artificial intelligence, machine learning and even blockchain. EMC’s mission is to partner with our network of independent insurance agents to provide risk protection, improvement and solutions for policyholders. As such, we are excited about any new technology that helps policyholders mitigate risk and avoid losses at an affordable rate.

CD: I am excited about the advancements in artificial intelligence, and I believe it has the potential for broad impact on our industry. AI has the potential to generate significant efficiencies that can impact everything from underwriting, customer service, to back-office functions. With all the emerging technology, we are focused on investing in attracting, developing and retaining talent, as people are what ultimately make great things happen.

What do you believe will be the biggest innovation that will affect the insurance industry in the next few years?
AF: The biggest innovations are not going to be those that make insurance a “robo” process. Making decisions about insurance is inherently a very personal process — and can include emotions like fear, hope, confusion or sadness. The most meaningful innovations will be those that make insurance more human. These could include tools that allow for better online research, processes that acknowledge where insurance language can be confusing or technology that complements human engagement. Innovations that know when and how to slow processes down when sentiment analysis indicates confusion or providing additional assistance before frustration sets in has the potential to move our industry forward in meaningful ways.

PH: The biggest innovation will come from combining emerging technologies to create new frictionless business models. These technologies will be a key driver to connect networks of people, devices and companies in new ways. We believe this will leverage dynamic networks of connections and data and create new opportunities to leverage capital/assets in unique ways to generate value.

JG: The biggest innovation for the insurance industry — it’s too soon to tell. But I believe it will play out at the intersection of those emerging technologies where AI, analytics and new tools combine to make the biggest impact.

CD: From an innovation perspective, there is growing potential for how the insurance industry leverages new data sources in different ways for pricing, underwriting and claims. With the expansion of IoT (internet of things), we will have potential to access data from connected homes, automobiles and many other smart devices that can improve how we calculate potential risks and losses.