Standing as we are at the beginning of 2021 to assess how technology is likely to be deployed generally and in particular insofar as it impacts insurance, we see a very different landscape to that which stretched out before us in 2020. COVID-19 has upended business and social norms and has accelerated the use of certain technologies.
We have purposely steered away from phrases like AI, Blockchain and Machine Learning in this piece, as it is a given that these technologies will play a part in the digital journey of the insurance industry over the coming year. Moreover, it is also assumed that, particularly in light of the SolarWinds hacking event, cyber security will remain at the top of most business's list of technology priorities.
On-going need for virtual delivery of services
Bearing in mind the certainty that the virus will continue to mutate, necessitating a suite of infection management techniques to bolster the effectiveness of the various vaccines, business risk management will continue to include a level of social distancing and minimising of contact as part of day-to-day business life. Therefore, the first and most obvious technological trend of 2021 is the continued prevalence of technologies which facilitate virtual delivery of services to consumers and business.
Whilst the likes of Zoom and MS Teams will no doubt retain their dominance in the general video communication sphere, we can expect to see an increased rapidity in the rollout in industry-specific remote service delivery tools, using a combination of hardware and software to enable a vast array of tasks to be performed without the need to be 'on-site'.
No-Code & Low-Code development platforms
Turning to developments in projects with software at their heart, there is likely to be an expansion in the use of no-code and low-code development platforms. These platforms use a different build methodology to traditional coding techniques, such as graphical user interfaces, to create applications quickly and cheaply, without the need for a deep understanding of coding.
Whilst no-code and low-code techniques have, out of necessity, been a feature of delivering software projects in SMEs – as most SMEs can afford neither the time nor the expense of using more traditional software project methodology – outside of the tech sector, larger scale businesses have been slower to adopt no-code/low-code methodology.
The advantages of using these platforms are numerous and include:
- Increased agility and speed of project completion.
- Reduced input by expensive and scarce coding resource.
- Reduction in cyber risk from potential errors in home-grown code.
- Democratisation of the app-building process, allowing not just technologists with the prerequisite skills to create apps.
With the advent of more no-code/low-code platforms aimed at corporates and the increased focus on digital transformation and the customer's digital journey, there is likely to be an expansion in the use of such platforms within the insurance sector.
Before turning to the means of driving all these technological developments – namely data – the final noteworthy tech trend for 2021 is the likely increase in the deployment of 'headless' technology in insurance.
Put simply, headless technology is the use of 'frontends' and 'backends' in system infrastructure, rather than having a single system infrastructure. As these 'ends' can be designed as mutually exclusive elements, the customer-facing digital interface (frontend) can have a fast pace of evolution, thus allowing for a continually fresh UX, whilst maintaining a slower evolution to backend system development so as to maintain stability and keep system capex under control. With many insurers facing numerous legacy systems, this approach has obvious appeal to the industry.
Shift in data skillsets
Cricket is a sport that has always concerned itself with understanding performance and how to improve through data and analytics. Insurance is increasingly similar, and insurance technology will advance in 2021 through the improvement of one, more or all of the golden triangle of people, process and technology. Each of these three key pillars impacts the other two.
The predicted expansion of no-code and low-code development platform technology is likely to be accompanied by subtle shifts in the type of data skillsets sought by employers in the insurance sector – think an increasing proportion of Ben Stokes all-rounder types rather than specialist Jimmy Andersons.
Salaries for specialist skillsets such as data scientists have been - and will continue to be - driven ever upwards, and potentially out of reach of SMEs. However, more insurers are becoming aware of the value of the hybrid or bridge skillset – increasingly advertised as 'data translators' - who have a strong footing in both the technical insurance, data and technology camps, and who can ensure a data-driven product or solution is fit for purpose in a holistic, rather than narrow way. The owners of these skillsets usually come from insurance backgrounds rather than data science, and they are far more affordable!
Richie Benaud, when asked about why he was such a successful captain of Australia, famously said:
"Captaincy is 90 per cent luck and 10 per cent skill. But don’t try it without that 10 per cent."
In the data and technology context, perhaps replace 'captaincy' with 'data-driven technology', 'luck' with 'specialists' and 'skill' with 'hybrid all-rounders' and….well, you get the picture.
Diversity is increasingly – and rightly – important to insurers. In 2021, increased diversity within insurance businesses will drive the adoption of stronger and more effective processes and governance for data-driven solutions or products, as improvement in these areas demands diversity of skillset and thought.
What of data quality itself? Poor-quality data abounds in the insurance sector and this is because so much of it is still captured via us inefficient humans. The humans employed by insurers in this practice are seldom invested in the process, frequently because insurers don't know how to, can't, or won't drive the investment required into the task. In 2021, we foresee insurers becoming increasingly aware of the importance of high-quality source data and therefore increasingly improving their data quality by a two-pronged approach of increasing investment in technology to convert unstructured data to structured data at scale, and through properly engaging their humans who still manually capture or cleanse much of their data. Human input into these data sets will also be vital to avoid the consequences that might flow from data, unintentionally containing elements of bias, being used to train algorithms. High-quality data will inform the production of high-quality data-driven solutions, after all.
In concluding, it is safe to say that, in the coming year, the pace of digitisation will only continue to increase, as it has done every year in the 21st century.