Insurance Majors Pulling Out The Checkbooks For Digital Innovation

HfS is seeing exciting new examples of how insurance companies are investing in digital innovation to both add new capabilities as well as to transform their existing operations.  We wanted to share some of the more recent interesting public announcements, which represent the visible tip of a broader movement of change across this industry. 

• This week Progressive expanded its innovation services team by opening "Business Innovation Garage" where dedicated IT employees will work in a new environment to spearhead ideas around emerging technologies.  This garage will integrate with  cross-departmental staff to help improve the claims process, understand consumer behaviors such as driving patterns better and overall seek to improve the customer experience.
• Last week USAA and AIG followed State Farm in getting approval from the FAA to test drones for new applications. USAA’s primary test case is to use drones to speed up insurance claim reviews following natural disasters, while AIG plans to conduct inspections for risk assessment, risk management, loss control and surety performance for customers in the U.S.
• Allstate back in end November 2014 made news in India with its plans to invest $1B in the country in the next 3-4 years on technology and operations including investing in technology accelerator programs. Allstate was already in talks with Indian startups focused on the convergence of telematics, data analytics and mobile technology to look at analyzing driving behavior, training and insurance analytics. We see this as the start of a broad program across insurers to integrated the Internet of Things (IoT) into the capabilities and processes of the industry.

The HfS Digital Transformation study revealed that the majority of services buyers feel that digital is going to fundamentally change future operating models. The largest insurance companies are showing that they want to lead the change and include disruptive technologies into their own businesses. While Progressive is stressing on cross-company collaboration, including aligning business leaders and thinkers with IT, Allstate wants to leverage the power of the global digital ecosystem of partners and startups, and USAA, AIG and State Farm’s announcements suggest technology experimentations above everything else.

HfS Research believes that in order to really embrace the “As-a-Service Economy,” enterprises will have to develop new capabilities that go beyond what was possible in the past – enabling change and collaboration within the enterprise, exploiting the dynamism of the partner/startup ecosystem, and making focused technology investments to address specific business problems.

Our upcoming HfS Insurance As-a-Service Blueprint will be putting more focus than ever on the value that transformative digital innovation is making on the property  & casualty and life & annuities markets, in line with this industry shift to the As-a-Service Economy.