Insight: Digital indigestion
You may have read Nigel Walsh’s predictions for 2021 as he detailed the trends we should expect to see this year and beyond. Here he examines how 2020 resulted in a push towards technology, as digital became a catalyst for change, and how we should take the next step as we journey toward the insurer of the future.
As many of us opened our laptops, phones, and iPads at the beginning of the year, after a well-earned, and let’s face it, well-needed break, we also looked up for the first time to see what state 2020 left us in. Not the pandemic or ongoing global health emergency, but all the work around new tools, systems, regulation, governance, hardware, and other technology deployed for the first time at breakneck speed in an industry rarely associated with pace of change.
This time it was different, everyone just ran, as fast as we could, laptops and hardware ordered and almost all teams moved to WFH almost overnight. If you had asked any of the industry leaders or professionals dealing with business change, it was never an event that we deemed possible or imaginable in such a short period of time. But we did it!
There is an element of ‘Digital Indigestion’ to deal with following the aftermath of 2020 and getting ourselves ready for the long road ahead — whatever that may look like
As time passed, and we hunkered down to business as unusual, starting the year (in the UK at least) to a third national lockdown, with tight rules, home schooling and much more, one thing was clear — there is an element of ‘Digital Indigestion’ to deal with following the aftermath of 2020 and getting ourselves ready for the long road ahead — whatever that may look like.
Pre-pandemic, the talk of the town was how technology could change the insurance dynamics, from AI, to machine learning, to Robotics and so much more. It has been for many years to be fair. I can’t see the world ever having less technology than we did yesterday, whether it’s in home or work. The key really is how it evolves, adapts, and most importantly, is adopted over time. Technology such as telematics has been around for over 25 years but is really only meeting broader adoption now as the mass adoption of smartphone, mobile internet, and much more, is widely available so that it truly becomes possible.
Our Tech Trends report has tracked many of these over the last 12 years, in what can only be described as a ‘Star Wars’ like chart! See https://www2.deloitte.com/content/dam/insights/articles/6730_TT-Landing-page/DI_2021-Tech-Trends.pdf for the full report and infographic on the previous page. As an aside, there is also a good summary from across all industries through our Deloitte 2021 predictions which can be found at https://www2.deloitte.com/content/dam/insights/articles/US93838_TMT_Predictions_2021/93838_TMT-predictions-2021-infographic.pdf. It’s truly fascinating to see how every industry is under a constant technology-led evolution, from athletes to media and everything in-between.
What is evident here is that many of these technologies we see being deployed in the market today are 4-7 years old before they get adopted at some level of scale. Others seem to be a ‘forever burden’. I remember my first job where I was working in the Data Processing Department on a DEC VAX6420 and was told it was nearing the end of its life.
That was 20 years ago, and I don’t know if it’s still going, but you can see core-revival has been a constant over the last decade and is likely to continue from my client conversations over the last 10 years — perhaps in a different form. Other technologies come and go — blockchain seems to have reached a peak and then gone quiet for the last few years. What we normally do is take this broad spectrum and then apply it directly to insurance, from direct carriers to brokers and re-insurers, to see what creates the greatest opportunity.
What’s evident to me here, is that through the pandemic we doubled down on things that made an immediate impact, mostly enabling technology — we started the evolution. In many cases, the workplace of the future or the desire/need to work from home, was nothing more than a mere experiment or potential pilot, afforded to a few but not all. The pandemic translated this to — lets execute our current plans at pace and digitise what we need to so we can continue to function and trade as normal, just with a dispersed remote workforce. Fast forward a year, this indigestion I referred to earlier is now starting to emerge.
We must look at what we simply digitised in our moment of need and start to look back at what we now need to re-evaluate, digitalise entirely, or reimagine
What’s critical now will be how we make best use of the things we accelerated, the investments made, and continue to leap forward. We must look at what we simply digitised in our moment of need and start to look back at what we now need to re-evaluate, digitalise entirely, or reimagine the process entirely. All too often
we are guilty of taking a broken paper process and making it a broken digital process. To drive efficiency, scale up and cost ultimately out, we need to take a long hard look at these and quickly adjust, or fear looking back in 5 to 10 years with simply more technical debt.
Is this pace sustainable, both for technology and infrastructure as well as the human element of the change? It’s been quite some year for us all. If 2020 was the year that we accelerated everything, 2021 and beyond will be the year in which we fix the indigestion, replan our 3–5- year roadmap, but with a spring in our step, know that it is without doubt now possible. We have all seen the memes and infographics flying around LinkedIn that said — ‘Who led the digital transformation at your company? CEO, CIO, CTO, COVID-19’.
The real winners for me are those that use this as a leapfrog to the revolution, that will continue to drive the insurance industry forward
Whilst I didn’t like the trigger that started this, on the positive side, it has been a brilliant accelerant for so many, that we have, in many cases, to level the playing field for digital engagement. What was once seen as competitive differentiator to a few, touted as unique differentiator by many of the insurtech community, is now table stakes for all to function normally. As I said in my 2021 predictions, some may spring back, or slow down, and deal with the evolution; the real winners for me are those that use this as a leapfrog to the revolution, that will continue to drive the insurance industry forward, creating new competitive battlegrounds for the future.
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