Engaging the NAIC on Emerging Insurance Technologies

Engaging the NAIC on Emerging Insurance Technologies
“If the regulators aren’t with you, expect insurance innovation to take longer and cost more.” This comment surfaces repeatedly in Celent’s research. We believe this is true and have seen this occur in the past (credit scoring, predictive analytics, telematics). In order to address this issue, we at Celent have begun to proactively engage regulators around emerging technology topics. Last week, I presented at the fall annual meeting of the National Association of Insurance Commissioners. Addressing the Property & Casualty Committee, the topic was “Emerging Technologies and Their Potential to Impact the Insurance Industry”. I observed that regulators are eager to receive information about this topic. This is understandable, as budget constraints make it very difficult to divert resources from the day-to-day crush of filing and approvals to concentrate on the future. However, mentioned in the session, it does the industry absolutely no good if the first time a regulator learns about a new technology is in a new filing! Celent is tracking several technologies with the promise to change insurance proposition in important, fundamental ways. For example, digital capabilities allow customer engagement to shift from periodic (only at time of renewal or a claim) to continuous (daily lifestyle suggestions). Another trend we see is a movement from “pay as you rate” to “pay how you use”. The introduction of telematics in the Auto line is the best example of this. Several case studies from around the world were used to illustrate how, in other regulatory environments, technology is being applied to insurance. The digital customer experience platform built by Tokio Marine was shown as an example of continuous customer engagement. AXA’s use of public and private data sources to change the FNOL reporting process was offered as a case of a transition from reactive to proactive claims management. Celent will continue to be involved in briefing regulators on these issues. We encourage insurance technology providers to do the same. We are all on this journey together and will get their faster and more effectively if we communicate actively.
Mike Fitzgerald About Mike Fitzgerald

Mike Fitzgerald is a senior analyst with Celent's Insurance practice. His career includes leadership positions in property/casualty automation, operations management and insurance product development. Mike's research focuses on innovation, billing, business process and operations, social media, and distribution management.

Comments

  1. Thanks for a great post, Mike.

    Throughout my insurance career, speaking the word ‘regulator’ inevitably resulted in rolling of eyes and groans.

    Recently, I’ve seen two situations where the regulators were approached early in the cycle of product development. The follow up comments from the insurance practitioners in both cases were, “They were happy to help us get the product to market.”

    For an industry that relies on communication for success, we still have a few lessons to learn.

    Patrick

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