“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of light, it was the season of darkness, it was the spring of hope, it was the winter of despair.” Charles Dickens in A Tale of two Cities
Or as Mark Breading from SMA writes today:
"At the same time, big gaps have been exposed. Much of the challenge has been related to manual, paper-based processes – inbound mail that needs to be scanned and ingested into workflows and outbound documents such as printed policies and checks, among others. Suddenly the need for a fully digital enterprise has become crystal clear."
"This is a unique point in time. All manner of tech solutions are required for insurers to advance their digital transformation. But the phase we are in has put a spotlight on the specific capabilities that are needed now. When the current crisis has passed, the world will be forever changed. Digital expectations will be different. It is likely that the digital transformation of insurance will accelerate, and there will be new and renewed demands for tech solutions of every kind. But for now, there is one category of tech solution providers"
This reminds me of an article I published back in February 2019 on McKinsey's Three Horizon's model of development. In summary-
The Three Horizons provided an incredibly useful taxonomy. The model described innovation occurring on three time horizons:
- Horizon 1 ideas provide continuous innovation to a company’s existing business model and core capabilities in 3 months to 12 months.
- Horizon 2 ideas extend a company’s existing business model and core capabilities to new customers, markets, or targets- typically 12-36 months
- Horizon 3 is the creation of new capabilities and new business to take advantage of or respond to disruptive opportunities or to counter disruption often taking 36-72 months
Insurers, banks, hospitality, manufacturing often still act as if Horizon 3 takes 36 to 72 months whilst the truth is that it can take just weeks. Insurers deserve tech solutions that upend the three horizons and deliver both the urgently needed capabilities and Horizon Three in weeks and months.
In fact, mirroring the case Breading describes "(One tech company told me that an insurance CEO called them and asked if they could have their solutions operational in two weeks!) .......
An existing carrier client (which had already transformed Commercial, Pet and Motor Claims on digital claims platform 360Siteview) demanded that the Home Insurance Book be migrated from a household name claims platform to 360SiteView within a week. Pleased to say that was done and completely remotely. Being the same claims management platform there was no additional training or change management issues to contend with.
Whilst insurers need practical solutions to address specific and urgent gaps in their current capabilities e.g. dealing with a surge in travel cancellation claims and curtailments, the last thing they need is a point solution that impedes longer term innovation.
A household name insurer had for years battled with the legacy of spending over $150 million on a promised claims management platform to be delivered by a global SI and claims management platform vendor only to suffer the classic "Under Spec-Over Time and Over Budget" syndrome.
Naturally they were wary of suffering yet another disappointment but Covid-19, the necessity of a work-from home MO and competitive disadvantage drove them to commit to a modern digital claims platform 360SiteView. eFNOL was planned, deployed and operational in just four days.
If that is not turning the Thee Horizon's model upside down I don't know what is.
Necessity is the mother of innovation and gives insurers an opportunity to solve short-term issues and start a true end-to-end transformation at the same time, with the same technology platform, for all categories of insurance and that is "future-proof".
In fact- why not read a paper that SMA published in 2019 and that presciently foresaw today's pandemic disruption. Click the link to read
All of this has significant implications for tech vendors. To put it simply, those that have digital solutions that address the gaps are quite busy. Those that have solutions in other areas are not. Companies that are especially agile at quickly standing up new digital capabilities have their phones ringing off the hook. (One tech company told me that an insurance CEO called them and asked if they could have their solutions operational in two weeks!)