Cyber-skepticism is rooted deep….it’s going to take a ton of work to bring people in the business world back
I just got back from Orlando, where I did a few sessions on my Thriving on Change! How to Create an Innovation Culture theme at the PLUS International conference. [ link ]
PLUS stands for Professional Liability Underwriting Society — in other words, the folks who underwrite liability policies for doctors, dentists, architects, lawyers and accountants. Given the year of scandal, its an industry in quite a bit of turmoil.
My focus was to talk about how emerging business systems will cause quite a bit of change within the industry. I once said that “the truth is that many insurance companies are using 1950s methods to deal with customers who deal with other financial institutions using 21st century methods.” [ link ]
Fact is, it’s not an industry that has been successful at leveraging technology — a 2000 Deloitte & Touche survey indicated that more than 90% of agent-carrier communications go by phone, paper and fax. Paper-intense! Did you know that there are 70 million pre-printed insurance forms floating around out there??? Imagine the cost-inefficiencies in the business.
Fortunately, the big carriers seem to have finally figured the Internet out, after a lot of false starts. Indicative of what is happening is Lloyd’s of London Project Blue Mountain initiative. Simply put, the objective is all about “creating efficiencies for both brokers and underwriters to get more reliable data on which to base their decisions.” In other words, streamline business processes and transactions — the paper! — in order to achieve cost savings between the providers and the brokers and underwriters in the business chain. [ link ]
The industry is slowly moving to a world where brokers and agents can bind policies on behalf of their clients online, and can access all kinds of other policy and transactional detail. In other words — ebiz in the insurance industry isn’t about having customers buy policies online — its about using technology to help the broker and agent do their job better.
OK, so the insurance companies have figured it out. But from every session I do for insurance companies and industry events such as this, I get the feeling that a) the staff is really in the dark ages about what is going on and that b) they’re skeptical of anything technology related overall.
We can fix a) — there simply needs to be better communication of the strategies that are driving this.
But b) is a big problem, and the fact that they think like that isn’t surprising. In their industry, they’ve seen futurists come along and predict “distintermediation. “It was said that all the brokers would disappear, as insurance companies began to sell direct. That didn’t happen, and won’t happen, because insurance is a fear-based product, and is sold, not bought.
Then they were told that there would be vast new insurance marketplaces online that would forever change the industry. That didn’t happen either.
The fact is, they’ve seen a lot of things come and go from the technology world, and the result of all these “big changes” that have never come about is that the typical employee in any insurance company — whether it be life, property and casualty, medical benefits or professional liability — is skeptical of any pronouncement made these days about new technology directions. There’s sort of an attitude there of “yeah, we’ve heard it all before, and it’s just another story. It won’t happen.”
Which means that insurance companies are going to have a real tough time making their new systems work. After all, how can they do so in a culture which has become so darned skeptical?
Food for thought. The terrible thing is that this is a reality in almost every industry. The lingering hangover effect of the dot.com years lingers on.